In Oil & Companies News 18/07/2016
The world oil market see-sawed this week as traders tracked growing investor risk appetite, fluctuations in the US dollar and stubborn supply glut worries.
“Oil prices are continuing their rollercoaster ride,” Commerzbank analysts wrote in a research note.
Crude futures began on the back foot on Monday, sliding as an increase in US drilling activity and a strong dollar reversed gains from last week’s better-than-forecast US jobs report.
A strong greenback makes dollar-priced commodities like oil more expensive for those using other currencies. That tends to weigh on demand and price levels.
Oil then rebounded on Tuesday as OPEC forecast an easing of the global oversupply that has weighed on the market in recent years.
Traders bid up crude oil after Monday’s rout, in what some analysts said was due partly to a technical correction.
Sentiment also brightened on speculation over possible global central bank stimulus measures following Britain’s recent referendum vote to leave the EU.
In its report this month, OPEC said it expected the global supply glut to ease further this year and next year on falling production by non-OPEC producers.
On Thursday, oil rose in tandem with a rally on global equity markets as rising risk appetite and a weaker dollar buoyed demand.
Prices then faltered on Friday on resurgent worries over a supply glut and weak demand, with some analysts forecasting crude prices could fall to US$40 a barrel.
At about 4:15pm GMT on Friday, WTI for delivery in August stood at US$46.05 a barrel, which compared with US$45.59 one week earlier.
Brent North Sea crude for September traded at US$47.67 a barrel, up from US$46.85 for the August contract a week earlier.
PRECIOUS METALS: Gold posted a weekly drop for the first time since May as investors turned to risk assets such as stocks, cutting demand for bullion as a haven.
The metal fell 2.3 percent this week, and holdings in gold-backed funds are also set for the first weekly decline since May.
Gold futures for next month delivery dropped 0.4 percent to settle at US$1,327.40 an ounce at 2:12pm on the COMEX in New York. The weekly drop was the first since May 27.
Silver imports by India are set to plunge from last year’s record as jewelers grapple with slowing demand and excessive inventories, according to Metals Focus Ltd. Silver futures for September delivery slid 0.8 percent to US$20.165 an ounce on the COMEX. On the New York Mercantile Exchange, platinum and palladium fell.
BASE METALS: Mining stocks posted an eighth weekly advance, the longest run in eight years, as hopes of more central-bank stimulus boosted equities and sent tin and zinc prices to the highest in more than a year.
The FTSE 350 Mining Index gained 5.3 percent this week, led by companies including Anglo American PLC and Glencore PLC, and the London Metal Exchange’s index of metals reached a nine-month high.
Copper rose as much as 1.2 percent Friday as economic data from China, the biggest metals user, beat estimates. Shares of Phoenix-based Freeport-McMoRan Inc advanced.
Zinc advanced in London. The metal for delivery in three months rose as much as 2.1 percent to US$2,235 a tonne, the highest since May last year, and closed at US$2,204 at 5:50pm on the LME. On the LME, aluminum, nickel, copper and lead dropped on Friday. Tin climbed as much as 0.9 percent on the LME to the highest since February last year.
