Oil prices remained under pressure in European session. The front-month contract for WTI crude oil plummeted to as low as 83.18 from Friday's close of 86.88 while the equivalent Brent crude contract slipping to as low as 105.5 after settling at 109.37 last week. The US is at the risk of a double-dip recession while other parts of the world are facing economic slowdown. Investors dumped oil amid speculations that demand will be adversely affected by the global turmoil.
OPEC members also concerned about the situation. According to Oil Movements, the cartel will cut its exports to 22.78M bpd in the 4 weeks to August 20 amid expectations of lower consumption. Iran's OPEC governor, Mohammad Ali Khatibi, said last Friday that member nations will hold an emergency meeting 'the downward oil price trend continues'. However, it's reported that Saudi Arabia is against such move.
Gold price broke about 1700 for the first time on record and surged to an all-time high of 1718.2 as investors sought shelter from safe-haven assets. The US dollar remained under pressure after S&P's downgrade and warning of further rating reduction. The euro also weakened in general but strengthened against USD. ECB's purchase of Italian and Spanish bonds offered little help to the outlook.
Commitments of Traders:
Speculators were bearish on the energy complex in the week ended August 2 amid rising worries over global economic slowdown. Net length for crude oil futures declined for the first time in 5 weeks, slipping -11 391 to 147 376 contracts. Net lengths for heating oil futures and gasoline futures also dropped to 28 359 and 64 152 contracts respectively. Net short for natural gas futures added +9 933 to 184 914 contracts during the week.
Speculators remained bullish on the precious metal complex, net length for gold futures jumped +11 558 to 247 175 contracts as the yellow metal surged to record highs while silver futures rose to 24 851 contracts. For PGMs, net lengths for platinum futures and palladium futures climbed to 22 973 contracts and 16 888 contracts respectively.