Oil prices recovered on Tuesday after plummeting more than 4 percent during the previous session, with US Treasury Secretary Steven Mnuchin stating that the US is considering waivers on Iran sanctions for a number of crude importers.
Crude Oil WTI Futures for delivery in September were trading at $67.16 per barrel, or 0.15 percent higher. Brent Oil Futures for delivery in September, which are traded in London, traded at $72.18 per barrel, also 0.5 percent higher.
Mcnuchin said to reporters that the United States wants to keep away from disrupting global oil markets. He said that the US was considering waivers for countries that require more time to cut down imports of oil from Iran as the US re-impose sanctions against Tehran.
US President Donald Trump has pulled the US out from the Iran nuclear deal, which was struck up in 2015, and decided to restore sanctions on Tehran last May.
“We want people to reduce oil purchases to zero, but in certain cases if people can’t do that overnight, we’ll consider exceptions,” stated Mnuchin. His remarks contradicted some of US official’s comments earlier, which claimed that there would be no exemptions.
Officials from the US State Department and US Treasury are set to conduct talks in Delhi this week to discuss Iran sanctions, according to statements from Indian officials.
Meanwhile, recent reports that Saudi Arabia offers more crude cargoes to Asian customers were also claimed to be headwinds for oil prices. US President Trump was reportedly looking into tapping the nation’s emergency oil supply to tame rising fuel supplies.
US West Texas Intermediate crude oil prices finished Monday’s session $2.95 lower, or $4.2, at $68.06.
Gold Prices Unmoved
Gold prices were little moved on Tuesday as the dollar firmed ahead of the US Federal Reserve’s Chairman Jerome Powell first congressional testimony.
Gold futures for delivery in August on the Comex division of the New York Mercantile Exchange increased 0.08 percent to $1,241.00 per troy ounce.
The US Dollar Index, which gauges the greenback’s strength against basket of six other major currencies, was not changed at 94.48 on Tuesday, with traders awaiting further hints on monetary policy from Powell’s testimony on the monetary policy and economy in front of the Senate Banking Committee later the day.
The dollar serves a vital role in finding the gold’s trajectory in a manner that a stronger dollar makes gold more expensive for the owners of foreign currency.
Prior to Powell’s appearance, the Fed released a positive assessment of the US economy, stressing that strong labor markets and inflation would support the central bank’s plan to push through gradual rate hikes.
Analysts along with Powell’s colleague expect two more interest rate increases this year while the economy continues to expand. The US Commerce Department revealed yesterday that the country’s retail sales increased by 0.5 percent for the fifth consecutive month. This further supported the expectations for the Fed’s interest rate increase.
Higher rates mean struggle for gold as the precious metal doesn’t compete well with yield-bearing assets when rate rise.
The precious metal has been under pressure during the recent weeks since investors have been favoring the dollar over gold amid the impact of the US-China trade dispute.
BWorldFinance is your primary source of news in the financial market, technology, and more. Visit bworldfinance.com now and get the latest happenings in the market. Register an account now and begin your investing journey!