CM: Oil Weaker Ahead of Weekly U.S. Crude Data, Gold Gains on German Worries
Oil is weaker in early morning trade as market eyes focus on the latest weekly U.S. crude inventories data to be released by the American Petroleum Institute later in the day and separately by the Department of Energy Wednesday morning. The greenback gaining strength against the euro is putting a damper on oil's rise, as is OPEC's Secretary-General Abdalla El-Badri's comment that crude at $70 to $80 a barrel is a comfortable zone for both oil producers and consumers.
Gold is up slightly amid continued worries about the European economy, particularly as Germany's ZEW Center for European Economic Research reported its index of investor expectations fell to minus 4.3 from 14 in August. The fall marks the fifth straight monthly decline, and the index's lowest level since February 2009, which has bolstered investors' appetite for safe haven assets such as gold.
At 0750 ET, Brent crude is 0.5% lower at $78.63 a barrel, while light sweet crude is down 0.8% at $76.61 a barrel, and natural gas is largely flat at $3.94 a million British thermal units.
Gold is up 0.9% at $1,258.00 an ounce, while silver is up 1.0% at $20.36 an ounce, and copper is down 1.3% at $3.43 a pound.
Enbridge Energy Partners LP ( EEP ) is preparing to fix the pipeline that connects Canada and the U.S. Midwest after the leaking line was shut down last Friday. Enbridge's 6A pipeline carries about 670,000 barrels of crude a day from Canada to the United States. The main line continues to be shut, while the company has closed down two other smaller lines to make the necessary repairs.
Meanwhile, Western Refining Inc ( WNR ) shut down all process units at its refinery in Yorktown, Virginia, due to poor East Coast refining margins. The company said it is evaluating all strategic alternatives for the plant that processes 66,300 barrels a day.
CNOOC Ltd ( CEO ) will start a bitumen refinery in northeast China that will produce 20,000 barrels a day. The Chinese giant is also expected to tie up with SK Energy (096770) to upgrade the quality of road paving material.
In the mining sector, Aquarius Platinum Ltd (AQP) said it may shut down its Blue Ridge mine in South Africa for up to seven months after two miners died last month. Aquarius said Blue Ridge's output will be substantially lower than expected if its revised business plan is approved by shareholders.
