Oil futures headed lower on Thursday (13 October), as oversupply sentiment returned to hound the market, while precious metals continued to struggle against a stronger dollar.
At 4:14pm BST, the West Texas Intermediate front month futures contract was back below $50 per barrel, down 1.12% or ¢56 to $49.62, while Brent was 1.14% or ¢59 lower at $51.22, as both benchmarks fell into negative territory for a second successive session.
The US Energy Information Administration (EIA) said crude oil inventories rose by 4.9 million barrels stateside to a total of 474 million barrels in the week through to 7 October, beating a Reuters analysts' poll predicting a rise by 300,000 barrels by a considerable distance.
Analysts said price declines were given further impetus by Opec's own data pointing to rising crude supplies. "Bearish tendencies may have found support from Opec's latest monthly report hinting at improved production numbers in Libya, Nigeria, and Iraq. At the same time, the divergence in production figures between available directly communicated and secondary sources grew to 870,000 barrels per day (bpd), with even Saudi Arabia showing a 160,000 bpd difference."
The decline undid some of the gains on the back of Saudi-Russian soundbites at the World Energy Congress in Istanbul where both leading crude producers reiterated their commitment towards an oil production freeze.
With tacit support from Russia, Opec agreed to limit its production to a range of 32.5m to 33m barrels per day (bpd) on 28 September, but will only spell out the nature of the cuts on 30 November.
Away from the oil market, precious metals continued to struggle against a strong dollar with the latest minutes from the US Federal Reserve pointing to a hawkish stance in favour of a possible interest rate hike in December.
At 4:38pm BST, Comex gold futures contract for December delivery was up a mere 0.25% or $4.40 to $1,258.20 an ounce, while Comex silver was down 0.20% or ¢3 to $17.47, with both precious metal poster contracts unable to find direction.
Research analysts at FXTM said precious metals, especially gold, could be vulnerable to further losses as the combination of dollar strength and rising Fed speculation create a foundation for bears to install repeated rounds of selling.
"Wednesday's hawkish Fed minutes may have cushioned the markets for a pending rate hike and such could translate to downside risks for gold. From a technical standpoint, a decisive break down below $1,255 could trigger a selloff towards $1,240."