Crude oil price rose to as high as 73.16 Thursday as driven by better-than-expected US housing starts, initial jobless claims and Philly Fed manufacturing data. However, the gauge ended the day -0.1% lower at 72.47 after surveys showing that OPEC exports will increase in coming weeks.
RBOB gasoline climbed +0.2% to 1.85 while heating oil added +0.8% to 1.84. Natural gas erased previous gains and slipped -8% to 3.46 although gas storage increased only ++66 bcf to 3458, compared with consensus of a +80 bcf gain.
US housing starts increased to 9-month high at 598K in August while July’s reading was also revised up to 589K. all of the gains were from multi-family starts as single-family starts unexpectedly reversed the uptrend and fell -3% during the month.
Initial jobless claims dropped to 545K in the week ended September 12 from 550K in the prior week. As the market had anticipated an uptick to 558K, the data did provide pleasant surprise and signal the economy is improving. 4-week average claims also plunged -9K to 563K.
After the Empire State Index, the Philly Fed manufacturing index also beat market expectation by surging to 14.1 in September (consensus:7.8) from 4.2 in August. This suggested manufacturing sector in the region has improved more rapidly than estimated.
After all those positive macro-economic data, traders took profit as the benchmark contract for WTI crude soared towards the upper band of the recent trading range of 65-75. According to Halifax, a tanker-tracker based in England, said that OPEC will increase its sea exports by +0.9% to 22.57M bpd in the 4 weeks ending October 3. The news probably also weighed on USD.
Long liquidation was seen in gold as price plunged -1.75 to close at 1013.5 after surging to new 2009 high at 1025.8. Silver and platinum also dropped -0.9% and -0.6% respectively. The precious metals declined although USD fell to fresh 1-year low against the euro because investors took profits from recent rallies. Over the past 4 weeks, gold price has risen +10%, while silver and platinum has surged +25% and +10% respectively.
From the Commitments of Traders report reported by the CTFC, net speculative long positions in gold, silver and platinum have all reached the highest level in more than a year (new highs for gold and platinum). In the near term, short-selling pressure is likely as traders book profits.