Crude Oil
West Texas Intermediate oil dropped the most in more than three months, widening the discount to Brent, on projections that a government report will show that U.S. crude stockpiles climbed last week. “The market is moving lower on expectations that we’ll get another supply build in report,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “Inventories are getting close to 400 million barrels, which is very bearish for the market, U.S. crude inventories increased 3 million barrels last week, the highest level since June 2013, the EIA, the Energy Department’s statistical arm, said last week. Production climbed to 8.3 million barrels a day in the period, the most since April 1988.
Gold
Gold fell to a 10-week low as signs of an improving U.S. economy crimped haven demand. Manufacturing in the region covered by the Federal Reserve Bank of Richmond in Virginia expanded in April, reinforcing the U.S. central bank’s view that the economy is recovering and stimulus cuts are warranted. The Fed in March reduced the monthly pace of bond purchases by $10 billion to $55 billion, and signaled additional cuts in “further measured steps.” “Gold remains under pressure as long as economic data out of the U.S. is positive,” Sun Yonggang, a macroeconomic strategist at Everbright Co., said in a telephone interview from Shanghai. “We see some support from the little pickup in physical activity when prices fall below $1,300.
