WTI crude oil price eased further in European session. Downgrade of Hurricane Isaac back to a tropical storm and the unexpected increase in US crude oil inventory were the main reasons weighing on oil prices. Brent crude oil traded more steadily as maintenance in North Sea facilities as well as ongoing tensions over the Middle East continued to support price. Gold retreated for a second day on profit-taking after the strong rally last week.
The National Hurricane Centre reported that Hurricane Isaac has been downgraded back to a tropical storm. Moreover, it did not cause much damage to oil refineries. Concerns over oil supply disruption were relieved, thus sending oil prices lower. Meanwhile, increase in crude oil inventory also pressured prices. Crude stockpile increased +3.78 mmb to 364.52 mmb in the week ended August 24. Stockpiles rose 3 out of 5 PADDs. Gold prices retreated on profit-taking but the medium-term outlook of the yellow metal should remain firm.
Confidence data in the Eurozone fell more than expected. Consumer confidence was unrevised at -24.6 in August. Economic confidence declined -1.8 points to 86.1 in August. The market had anticipated a milder dropped to 87.5. Industrial confidence fell to -15.3 while the July data was revised lower to -15.1. Services confidence plunged to -10.8 in August from -8.5 in July. The market had expected a slip to -9.0.
In the US, personal income probably added +0.3% in July, moderating from a +0.5% gain a month ago, while personal spending might have risen +0.5%, following a flat reading in the previous month. Initial jobless claims might have eased to 370K in the week ended August 25, down from 372K in the previous week. The focus is of course the Jackson Hole Symposium, especially Bernanke's speech which might give indications on the Fed's next move to stimulate economic recovery.