Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
After trying to test $52 per barrel area in June, oil price has been declining steadily since the UK referendum.
Key factors at play in Crude market –
- According to latest IEA report, crude market is closer to balance but product stocks are very high and may work against price stability.
- Recent research by Rystand Energy has revised US crude reserve upwards to 264 billion barrels, more than Saudi Arabia and Russia.
- Goldman Sachs has called that crude recovery is over and price may once again drop lower.
- Canada’s production is under recovery after wild fire shut down 1.8 million barrels/day.
- Nigeria and Venezuela still facing troubles with production and outages. Militants in Nigerian delta has declined to a ceasefire.
- U.S. oil production has dropped to 8.48 million barrels/day and likely to drop further. It has declined by 0.14 million barrels per day since last week.
- Major supply increase is taking place from the Middle East. Iran’s output rose 80,000 barrels/day in May to 3.84 million barrels/day. Saudi Arabia is expected to increase production to 11 million barrels/day.
- India has emerged as the biggest incremental crude buyer this year.
- American Petroleum Institute’s (API) weekly report showed the drop in oil inventory by 2.3 million barrels.
Today’s inventory report from US Energy Information Administration (EIA), to be released at 14:30 GMT.
Trade idea –
- Bears have taken control of the WTI and we expect the price to decline as low as $35 per barrel. WTI is currently trading at $45.5 per barrel.
