Oil Weaker on China Growth Worries; Gold Falls Ahead of FOMC


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Oil is on the decline in early morning trade as worries about China's economic strength weigh down the energy market. Beijing reported that its July trade surplus surged unexpectedly to an 18-month high as domestic demand dwindled. Traders are also looking to the release of the Federal Reserve's statement following the FOMC meeting later in the day.

Gold is lower too as investors take a wait-and-see approach before the FOMC statement release. Many analysts expect the Fed to keep interest rates pat and keep the wording on monetary policy to be little changed. That is seen to keep the greenback weak, which in turn would increase the yellow metal's allure as an alternative asset since it makes dollar-priced commodities cheaper for holders of other currencies.

At 0755 ET, Brent crude is down 1.6% at $79.71 a barrel, while light sweet crude is down 1.3% at $80.43 a barrel, and natural gas is down 0.5% at $4.29 a million British thermal units.

Gold is down 0.4% at $1,198.30 an ounce, while silver is 0.6% weaker at $18.13 an ounce, and copper is down 1.2% at $3.29 a pound.

India's Oil and Natural Gas Corp ( ONGC ) is looking to join forces with Russia's OAO Rosneft ( ROSN ) to bid jointly for the Trebs and Titov fields in the Arctic north, according to Russian daily Vedomosti. Neither company has confirmed the report.

Delta Petroleum Corp ( DPTR ) reported its second quarter loss shrinking on the back of higher rig utilization and favorable pricing. The independent oil and gas group also sees production to increase to 7.2 billion cubic feet equivalent from 6.9 bcfe in the latter half of the fiscal year after accounting for sale of non-core assets to Wapiti Oil & Gas LLC in July.

As for Canada's TransAtlantic Petroleum Ltd ( TNP ), it reported its second quarter loss widening as total costs and expenses nearly tripled from a year ago.

In the mining sector, European Goldfields Ltd ( EGU ) reported going into the red in the second quarter, CFO Tim Morgan-Wynne expects the company to continue posting a loss this year, but may return to a small profit next year, according to Reuters.

ArcelorMittal South Africa Ltd ( AMSOY ) said it will buy all shares in Imperial Crown Trading, which owns a portion of the prospecting rights in Kumba Iron Ore Ltd's ( KIO ) Sishen mine. The ArcelorMittal unit will pay about $111 million to Imperial.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing Commodities

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