Oil spot price set to jump on distillate demand

West Texas Intermediate (WTI) is currently trading at $97.70 a barrel, close to yesterday’s high, with the price supported by speculation that the US Energy Information Administration (EIA) will today report contracted distillate inventories last week as frigid weather continues to grip the world’s largest oil consumer.

The industry-funded American Petroleum Institute (API) yesterday reported that distillate stockpiles fell 1.46 million last week, gasoline inventories dropped 1.18 million barrels and crude oil stocks rose 384,000 barrels.

The EIA is due to announce the official data at 15.30 UTC today and analysts are picking distillate supplies, including heating oil and diesel, to have fallen 2.5 million barrels to 113.7 million last week, with gasoline stockpiles up 1.15 million and crude supplies 2.55 million.

WTI has risen during the past three weeks on weather-driven rising distillate demand and decreasing inventories and US weather forecasters are projecting sub-normal temperatures across most of the contiguous states at least till the 13th of the month. They also foresee heavy winter storms in some states.

Gold Drifts Lower in Quiet Trade

Prices of gold and silver on the European spot market drifted slightly lower in quiet trade Monday as top physical gold-consumer China remained absent from the market.
The metals were expected to hold narrow trading ranges for the session, as China continued Lunar New Year celebrations and the global economic data agenda was quiet.
A key risk event awaits this Friday with the release of the U.S. January employment report and this should keep position-taking contained in terms of size and time frame
Fed policy remains the key global price driver for gold, as the U.S. central bank continues to taper back economic stimulus measures that had kept elevated demand for gold as a hedge against inflationary risks.
Recent turmoil in emerging markets continued to provide a cushion under gold and silver, which are considered safe-haven assets and a traditional store of value in times of risk

Gold falls as investors digest Fed stance

Gold for April delivery, the most actively traded contract, on Friday fell $US2.70, or 0.2 per cent, to settle at $US1,239.80 a troy ounce on the Comex division of the New York Mercantile Exchange.Gold prices recently have also tracked shifting views of the economic turmoil in some emerging markets. Some investors view gold as a safe haven, and futures hit a two-month high last week when investors were cashing out of assets seen as risky amid political and economic troubles in developing markets from Turkey to Brazil.

Euro Mixed Ahead Of PMI Data

Italy's PMI data is due. Thereafter, final PMI reports are due from France, Germany and Eurozone. Final Eurozone manufacturing PMI is expected to match the flash estimate of 53.9 in January.Before these reports, the euro showed mixed trading against other major currencies. While the euro advanced against the pound, it held steady against the rest of major currencies.The euro was quoted at 1.3486 against the greenback, 1.2215 against the franc, 0.8229 against the pound and 137.79 against the yen at 3:40 am.