Oil prices are lower in early morning trade as the dollar gained against the euro amid resurgent worries about Europe’s sovereign debt situation particularly in Ireland and Portugal. Market eyes will be on the release of the latest weekly U.S. crude inventories data to be released by the American Petroleum Institute later in the day, and by the Department of Energy Wednesday morning.
Gold, meanwhile, slipped from its record highs as investors swooped in to take profits, but many analysts expect the yellow metal to trend higher in the longer term amid renewed concerns about European growth prospects and the global economy in general. Indeed, ABN Amro Markets’ precious metals head Gerry Schubert said that gold holdings in exchange-traded products could climb between 10% and 20% for each of the next two years.
At 0750 ET, Brent crude is down 0.5% at $78.20 a barrel, while light sweet crude is down 0.9% at $75.83 a barrel, and natural gas is up 0.8% at $3.83 a million British thermal units.
Gold is 0.7% weaker at $1,290.20 an ounce, while silver is down 1.3% at $21.20 an ounce, and copper is 0.4% lower at $3.58 a pound.
BP plc ( BP ) was told by the U.S. Department of Justice that its probation for violating a plea deal over the 2005 Texas City refinery will not be revoked. Instead, the company will be given another 18 months to complete safety reviews and upgrades at the refinery. The energy group’s new CEO Robert Dudley takes on his post this Friday.
Equatorial Guinea’s minister delegate for mines Gabriel Obiang Lima said the country has signed five oil concessions deals including two with Russia’s Gazprom Neft, the oil arm of Gazprom OAO (GAZP). The country also signed a deal with privately held Swiss mining group Glencore International AG. Equatorial Guinea expects oil production to increase by over 10,000 barrels a day within the next two years as offshore developments operated by Noble Energy Inc ( NBL ) become ready.
In the mining sector, Shanta Gold Ltd ( SHG ) signed a joint venture options agreement for a dump re-treatment with souther Tanzania’s Saza village council. The village owns abandoned tailings dumps and rock dumps, and through the deal, Shnata will re-treat the dumps if it makes economic sense. The dumps are located within 7 km of the proposed New Luika gold mine that is expected to start up in the fourth quarter.