U.S. and Brent crude oil futures have been declining since Monday, well into late US session trading on Tuesday. Selling was spurred by global demand worries and when buy stops were hit.
Additionally, weekly U.S. petroleum inventories that called for an across-the-board increase fuelled investors expectations for a drop in oil prices.
On the New York Mercantile Exchange, May crude oil futures for June dropped to a session low of $110.30. It hit US session high of $112.88 .
In London, ICE Brent for June was down $3.37 to touch a session low of $121.75. In early trading, it hit a session high of $125.02.
Silver suffered losses for the second consecutive day, losing over 30 pips in the US trading session. It hit a high of $44.26 and a low of $ 40.59. Silver was likely overbought after it had reached an all-time high last Thursday at $49.48.
Gold was dragged down as well after COMEX’s third margin hike in a week prompted traders to liquidate their positions. Gold made its largest correction since January as the death of al Qaeda leader Osama bin Laden on Monday prompted some investors to take profits from the ultimate safe-haven asset.
“We are seeing accelerated margin selling in silver and it’s spilling over into gold and crude oil. When you have big margin selling in one commodity, it has a cascading impact on the markets,” said Bill O’Neill, partner of New Jersey-based commodity investment firm LOGIC Advisors.
Spot gold prices fell from the US open level of $1542.38 to a session low of $1526.93.