Global oil prices sank this week to an eight-month low in New York on high US crude and product stockpiles that indicated supplies continue to outpace demand.
Commodity markets also reacted on Friday to weaker-than-expected key economic data in the US, a major consumer of raw materials.
The US added a paltry 74,000 jobs last month, a slowdown in employment creation that dampened hopes that the world’s biggest economy has moved into higher gear.
OIL: New York’s main oil contract West Texas Intermediate dove on Thursday to US$91.66 per barrel, a level last seen on May 1 last year.
The US Energy Information Administration reported on Wednesday that crude stockpiles fell last week by a smaller amount than analysts had expected.
“The [price] weakness was partly due to concerns about the excess supply of oil in the US, which came to the forefront once again after crude inventories showed a smaller reduction than had been priced in,” Forex.com analyst Fawad Razaqzada said.
Oil prices are likely to face further downward pressure, with Libyan output up to 546,000 barrels a day from 250,000 barrels previously after the reopening of a major oilfield.
However, analysts do not expect Libya to return to its previous output of 1.4 million barrels soon.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery next month dropped to US$106.33 a barrel from US$108.25 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate, or light sweet crude, for next month fell to US$92.27 a barrel from US$95.45.
PRECIOUS METALS: Gold and silver prices rose on the back of a weaker greenback, as disappointing payrolls data sparked speculation that the US Federal Reserve could delay further tapering its stimulus.
“Gold has been among the beneficiaries of a weaker dollar after the December nonfarm payrolls report missed expectations quite badly,” Razaqzada said.
“The unexpectedly poor US employment number has given gold and silver prices a significant boost ... raising the prospect that any further stimulus reduction could well have to wait until March at the earliest,” CMC Markets analyst Michael Hewson added.
The weaker greenback makes US dollar-priced commodities cheaper for buyers using stronger currencies, which tends to stimulate demand and prices.
By late on Friday on the London Bullion Market, the price of gold rose to US$1,244.25 an ounce (28.4g) from US$1,234.50 a week earlier, while silver eased to US$19.80 an ounce from US$20.18.
On the London Platinum and Palladium Market, platinum increased to US$1,425 an ounce from US$1,388, as palladium advanced to US$737 an ounce from US$723.
SUGAR: Prices plunged to their lowest level since 2010 as investors fretted over the weak Brazilian real and the prospect of plentiful supplies.
Sugar struck three-and-a-half-year lows at US$424.30 per tonne in London and US$0.1541 per pound (0.45kg) in New York.
“The raw sugar price has dropped to its lowest level since June 2010,” Commerzbank analysts said.
“A weaker Brazilian real is generating selling pressure — it is again nearing the lows it hit in August 2013 and is thus contributing to higher sugar supply from Brazil, the world’s largest exporter,” they added. “Furthermore, Thailand — the No. 2 exporter — has reported a promising start to its harvest.”