NYMEX Remains under Pressure in Reaction to Fears of Low Credit Rating for European Union Members

Crude oil futures remained under pressure on Monday in reaction to the announcement of Standard & Poor’s credit agency for a possible credit rating cut of European Union member countries from AAA to AA+. As per the latest report of S&P, Germany, France, the Netherlands, Finland, Austria and Luxembourg were in the list of possible credit rating downgrade in next 3 months.

In reaction to the news the euro fell versus the US dollar eventually making the dollar index DXY to rise. Commodities always happen to move in opposite direction of the US dollar as rising greenback makes commodities expensive for investors and holders of foreign currencies.

The dollar index DXY which measures the US dollar’s performance against its six major rival currencies gained to 78.628 on Monday as compared to 78.192 in the start of the Asian trading session.

Crude oil futures contract for January delivery slightly gained by $0.03 to $100.99 per barrel on the New York Mercantile Exchange. Among other commodities, gasoline for January delivery fell 0.1 percent to $2.61 per gallon. Heating oil futures for the same month slightly gained to $2.99 per gallon while natural gas for January delivery declined 0.1 percent to $2.61 per million British thermal units.

Gold futures for February delivery also fell 1 percent or $16.80 to settle at $1,734.50 per ounce on the Comex trading of the New York Mercantile Exchange.

Copper futures for March delivery gained 0.9 percent or $0.03 to $3.62 per pound while silver for the same month delivery declined 1 percent or $0.31 to $32.37 per ounce.

Platinum futures contract for January delivery plunged 1 percent or $16 to $1,532.50 per ounce while palladium futures for March delivery gained 0.1 percent or $0.65 to $646.50 per ounce.


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