Oil is trading lower continuing the recent decline ahead of data on U.S. stockpiles reported by the American Petroleum Institute at 20:30 GMT. Last week stockpiles reached the most in 80 years. Concerns over a maximum of capacity reached put further pressure on the price. The U.S. are the world's largest consumer of oil. Brent Crude lost -1.69%, currently trading at USD53.03 a barrel. On January 13th Crude set a low at USD45.19. West Texas Intermediate declined -1.94% currently quoted at USD43.03.

The OPEC published its monthly report yesterday. The organisation reduced the outlook for demand in 2015 and warned that U.S. output might not come down before the end of the year - despite a lower rig count.

On Friday the IEA warned in its latest monthly oil report that the recovery in prices is fragile and that U.S. production might even rebound - further worsening the global supply glut.

Oil prices declined by almost 60% between June 2014 and January 2015 and recovered by almost 35% in 2015 before declining again. Although prices rebounded after setting new lows, worldwide supply still exceeds demand in a period of low global economic growth, pushing stockpiles to record highs and weighing on prices.

Gold is trading little changed almost flat today after last weeks rebound from recent 3-month lows set on Wednesday last week. A broadly weaker greenback lends some support to bullion today. All eyes are now on the FED's upcoming two-day monetary policy meeting and the rate decision on Wednesday to see if the word "patient" will be dropped and if the U.S. economy has gained enough momentum. Investors hope that the minutes will provide further insight into when the Central Bank is going to hike rates that have been near zero since 2008. Yesterday's U.S. data came in weaker-than-expected leading investors to reconsider estimates on the timing of the FED's next move.

A stronger U.S. dollar and the prospect for higher U.S. rates recently weighed on the precious metal as gold is dollar-denominated and not yield-bearing.

Gold is currently quoted at USD1,153.70, -0,05% a troy ounce. On Thursday the 22nd of January gold reached a five-month high at USD1,307.40. On Wednesday last week gold traded as low as USD1,147.30, a three-month low.

BLOOMBERG

When Yellen Gets Less Predictable She's Getting Back to Normal

(Bloomberg) -- Janet Yellen wants to be less predictable, if only a little.

Should the Federal Reserve this week jettison a promise to remain "patient" about raising interest rates, as anticipated by economists, the omission will mark the end of an era in Fed communications policy and could usher in a period of greater market volatility.

Beginning in June, and for the first time since 2008, officials would be making rate decisions meeting-by-meeting, based purely on the data in front of them, rather than committing themselves to keeping borrowing costs low.

Source: http://www.bloomberg.com/news/articles/2015-03-17/when-yellen-gets-less-predictable-she-s-getting-back-to-normal

BLOOMBERG
China's Swaps Drop Most in Six Weeks as Central Bank Cuts Yield

(Bloomberg) -- China's interest-rate swaps dropped the most in six weeks after the central bank cut a short-term lending rate for the second time this month, helping counter a slowdown in the world's second-largest economy.

The People's Bank of China said it auctioned seven-day reverse-repurchase agreements at 3.65 percent, down from 3.75 percent last week. The rate was also lowered by 10 basis points on March 3, two days after benchmark interest rates were reduced for the second time in three months. Capital outflows are complicating efforts to bring down borrowing costs as the economy expands at the slowest pace in two decades.

The cost of one-year swaps, the fixed payment to receive the floating seven-day repurchase rate, fell 13 basis points to 3.63 percent as of 4:38 p.m. in Shanghai, data compiled by Bloomberg show. That's the biggest drop since Feb. 4. The rate climbed to 3.83 percent earlier, the highest level since July.

Source: http://www.bloomberg.com/news/articles/2015-03-17/china-s-rate-swaps-retreat-as-pboc-cuts-yield-on-reverse-repos

REUTERS
Brent comes off 6-week low to rise above $54, but glut worries drag

(Reuters) Brent Crude rose above $54 a barrel in choppy trade on Tuesday, recovering some of the previous session's losses when it hit a six-week low, but concerns over a growing supply glut kept a lid on gains.

Prices on the other side of the Atlantic fell for a sixth session to just above a six-year low, keeping their discount to Brent at near $10, a trend that analysts say could deepen.

"The oil market is currently oversupplied, driven in part by the success of North American shale," Morgan Stanley said.

While the U.S. rig count has dropped from 1,809 rigs a year ago to 1,125 last week, past cycles have shown there is "often a lag between when drilling stops and when oil supply stops growing", the bank said in a note.

Source: http://www.reuters.com/article/2015/03/17/us-markets-oil-idUSKBN0MD0AH20150317

(raw materials / closing price /% change)

Oil 43.88 -2.14%

Gold 1,153.80 +0.05%