Crude oil prices rebounded in the afternoon session following the ongoing sharp sell-off in the market. The DOE oil inventories report was fairly bearish but failed to provide renewed pressure as investors benefitted from the recent low levels in both Brent and WTI front month futures. The DOE report showed a small decline of 847,000 barrels in crude stocks for the week ending 12th December 14 versus analysts’ estimates of a 2.2 million barrels drop. Gasoline inventories surged 5.25 million barrels following a sharp increase of 8.19 million barrels the previous week. Distillate stocks fell slightly by 207,000 barrels, fairly in line with expectations. At the time of writing, Brent front month futures edged higher and breached above the key 60.0 area, showing signs of upside correction in the market.
Precious metals were fairly mixed as gold consolidated around $1190-$1200, while silver extended gains today towards $16.00. Risk appetite across global equity markets remains limited.
European equity markets were fairly mixed in today’s trading session, as investors remain cautious ahead of the first round of the Presidential elections in Greece and the US FOMC rate decision. At the time of writing, the CAC, DAX, IBEX and the London equity benchmark index traded in positive territory.
On the macroeconomic front, US CPI fell to 1.3% y/y in November compared to 1.7% in October. In the Eurozone, labour costs increased 1.3% y/y in Q3 2014 compared to 1.2% previously and the euro reversed yesterday’s gains, sliding lower against the US dollar, breaching below 1.24.
Today, the main focus will turn to the FOMC rate decision which could provide further clarification regarding the current US economic conditions and prospects. The USD index rallied strongly ahead of the US Fed rate decision trading around 88.6 against a basket of currencies.