Daily Analysis: Oil and Gold, February 1, 2012

CL2H

U.S. oil supplies climbed for the fifth time in six weeks as refineries reduced fuel production after gasoline demand tumbled, a Bloomberg News survey showed. Stockpiles rose 2.7 million barrels, or 0.8 percent, to 337.5 million in the seven days ended Jan. 27, according to the median of 11 analyst estimates before a weekly Energy Department report tomorrow. An increase of that size would leave inventories at the highest level since Nov. 4. Ten of the respondents projected a gain and one a decline. Companies operated refineries at 82.2 percent of capacity last week, unchanged from the prior week, which was the lowest level since May, the survey showed. Gasoline demand has fallen to the least in almost 10 years because of increased fuel efficiency and slower-than-forecast economic growth. “Weak gasoline demand continues to pressure refiners, “Tim Evans, an energy analyst at Citi Futures Perspective in New York, said by phone yesterday. “They are responding by cutting output, which is moving the supply surplus to the crude side of the market.” Crude for March delivery fell 30 cents, or 0.3 percent, to settle at $98.48 a barrel today on the New York Mercantile Exchange. Futures slipped 0.4 percent this month. Oil stockpiles also probably gained because companies delayed arrivals until the start of 2012, according to Jim Ritterbusch, president of Ritterbusch & Associates, a Galena, Illinois-based consulting company.



GOLD

Gold rallied to the most expensive in almost eight weeks, extending its best January performance since 2008. Silver was set for its strongest start to the year since 1983 and platinum jumped to a two-and-a-half month high. Spot gold gained as much as 0.6 percent to $1,741.07 an ounce, the highest level since Dec. 8, and traded at $1,740.41 at 4:06 p.m. in Singapore. It’s climbed 11 percent this month, the best advance since August. Silver rose 0.7 percent to $33.75 an ounce for a 21 percent gain this month. “Both physical and investment demand have been robust so far this year as gold is still seen as a good safety net for diversifying portfolios,” said Wang Xiaoli, chief investment strategist at Citic Futures Co., who was rated fifth in a Futures Daily and Securities Times poll of China gold analysts. Gold holdings in exchange-traded products climbed 0.6 percent this month, rebounding from December’s 1.3 percent decline, which was the largest outflow since January 2011. They were at 2,371.248 metric tons yesterday, within 1 percent of a Dec. 13 record, according to data tracked by Bloomberg. Mainland China’s gold imports from Hong Kong surged to a record in November as consumers bought the metal before the Lunar New Year this month. The nation, also the world’s largest producer, overtook India in the third quarter as the biggest gold-jewelry market, according to the World Gold Council.