Financial market climbed higher as investors were relieved after Moody’s left Spain’s credit rating at Baa3, albeit with a negative outlook and Greece signaled progress of the discussion with the Troika. Wall Street gained with the DJIA and the S&P rising +0.04% and +0.41% respectively. In the commodity sector, the front-month contract for crude oil traded narrowly while the Brent crude contract slipped -0.7% to 113.22 at close. Gold price rebounded for a second consecutive day with the benchmark Comex contract rising to a 3-day high of 1755 before settling at 1753, up +0.38%.

Despite deteriorating banking conditions, Moody’s announced to keep Spain’s credit rating at investment grade as the rating agency believed "the combination of Euro area and ECB support and the Spanish government's own efforts should allow the government to maintain capital market access at reasonable rates, providing it with the time it needs to stabilise public debt over the next few years". Moreover, Moody’s expected the Spanish government to "ask for an Enhanced Conditions Credit Line (ECCL) from the ESM (European Stability Mechanism) as a prerequisite for the ECB activating its OMT program in relation to Spanish government debt". Concerning Greece’s access of the next tranche of financial assistance, the EU/ECF/ IMF troika stated that "the authorities and staff teams agreed on most of the core measures needed to restore the momentum of reform and pave the way for the completion of the review". Greek Prime Minister Antonis Samaras said that he’s "confident we're doing everything we have to do in order to get it (a deal) and get it soon, so that we can move towards a recovery".

The DOE/EIA reported that total crude oil and petroleum products stocks slipped -2.67 mmb to 1094.40 mmb in the week ended October 12. Crude stockpile increased +2.86 mmb to 369.23 mmb as stockpiles rose in 4 out of 5 PADDs. Cushing stock dropped -0.14 mmb to 44.03 mmb. Utilization rate was up +0.7% to 87.4%.

Gasoline inventory added +1.72 mmb to 197.13 mmb as demand climbed +1.65% to 8.73M bpd. Production gained +4.72% to 9.05M bpd while imports soared +5.58% to 0.53M bpd. Distillate inventory slid -2.22 mmb to 118.66 mmb although demand gained +1.49% to 3.88M bpd. Imports slipped -25.44% to 0.09M bpd while production climbed +3.37% to 4.48M bpd during the week.

 

Oil and Gold Reports contributed by Oil N' Gold