Morning Call For Thursday, Dec. 20

Metals prices this morning are mixed with Feb gold (GCG19 +0.19%) +2.9 (+0.23%), Mar silver (SIH19 -0.05%) -0.003 (-0.02%), and Mar copper (HGH19 -0.85%) -0.022 (-0.79%). Wednesday's closes: Gold and Silver Market News and Commentary - Feb Comex gold (GCG19) on Wednesday closed up +2.8 (+0.22%), and Mar Comex silver (SIH19) closed up +0.117 (+0.80%). A slide in the dollar index to a 1-week low Wednesday pushed metals prices higher with Feb gold at a 5-month high and Mar silver at a 1-1/2 month high. Gold prices were boosted by technical buying after prices climbed above the 200-day average. Also, recent stock market turmoil that pushed the S&P 500 to a 14-1/2 month low Tuesday has been a bullish factor for gold on increased demand for gold as a store of wealth after long gold positions in ETFs rose to a 5-1/4 month high Tuesday. A positive for silver prices was the unexpected increase in U.S. Nov existing home sales (+1.9% vs expectations of -0.4%), which is positive for industrial metals demand. A negative for silver is increased fund selling as long positions in ETFs fell for a fifth consecutive session to a 5-3/4 month low on Tuesday.

Feb WTI crude oil prices (CLG19 -2.89%) this morning are down -$1.65 per barrel (-3.43%) and Feb gasoline (RBG19-2.43%) is -4.04 cents per gallon (-2.94%). Wednesday's closes: Feb WTI crude oil (CLF19) on Wednesday closed up by +$1.57 per barrel (+3.37%) and Feb Brent crude (CBG19) closed up +$0.98 (+1.74%). Feb RBOB gasoline (RBF19) closed up by +2.75 cents per gallon (+2.04%). A decline in the dollar index on Wednesday to a 1-week low spurred short-covering in the energy complex following Tuesday's plunge. Also, comments from Saudi Arabian Energy Minister prompted additional short-covering in crude futures when he said he is "certain" that OPEC+ will extend its 2019 crude production cuts when they meet in April. The energy complex also found support from an increase in the crack spread to a 1-month high, which gives incentive to refiners to purchase crude to refine it into gasoline. A bearish factor was weekly EIA data that showed a +1.09 million bbl increase in crude supplies at Cushing, the delivery point for WTI futures, to an 11-month high. In addition, U.S. crude oil inventories fell by only -497,000 bbl, which was bearish relative to expectations of -2.5 mln bbl. Gasoline inventories rose +1.76 mln, slightly above expectations of +1.6 mln bbl. The energy complex sold off sharply Tuesday with Feb WTI crude oil at a 1-1/4 year low, Feb Brent crude at a 14-month low, and Feb RBOB gasoline at a 2-year low on global supply concerns. The EIA late Monday forecast that U.S. Jan shale-oil crude production will climb to 8.166 million bpd, up +136,000 bpd (+1.7% m/m) from 8.030 million bpd forecast for Dec.

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