Oil has slumped more than 30 percent since peaking in June, dropping below $70 a barrel in recent days, as the U.S. pumps oil at the fastest rate in three decades and global demand growth slows. The Organization of Petroleum Exporting Countries’ failure to cut its production target last week has some speculating crude could sink a lot lower. The U.S. crude climbed after a government report showed that the country’s crude inventories dropped as refineries bolstered operating rates. Stockpiles fell 3.69 million barrels to 379.3 million in the week ended Nov. 28, the Energy Information Administration said. Refineries boosted operating rates for a fifth straight week while fuel supplies rose.
Gold climbed as higher energy prices damped concern that inflation will remain low and revived demand for the precious metal as a store of value. Oil is making gold investors cross-eyed. Because gold traders often track the cost of oil, which can impact consumer costs and inflation, a whipsaw in crude futures is spurring the biggest price swings for bullion in almost nine months. Adding to the pain for investors in the metal is a dollar rally that’s curbing demand for alternative assets.
