World oil prices surged this week after recent heavy losses, aided by signs of tightening US supplies according to analysts.
Crude futures shot higher in volatile trading as data revealed production cuts that could curb the supply glut.
The Baker Hughes North America rig count fell sharply in the week to Jan. 30, dropping by 128 rigs to 1,937. That compared with 2,393 a year ago.
Deep cuts in capital spending by major oil companies, including new announcements on Tuesday by BP and BG Group, also suggested there would be tighter supplies in the future.
“A lot of factors are at play. Obviously, the capital spending cuts just keep coming with BP, and we’re seeing one of the fastest drops of spending across the sector I can remember,” Price Futures Group account executive Phil Flynn said.
Some analysts cautioned the current oil price rebound likely would not last because supplies still far outweigh demand.
“Oil ... has enjoyed the combination of weakening supply and rising demand fundamentals to maintain its surge,” IG market analyst Chris Beauchamp said. “Oversupply does not disappear overnight, however, and the jury is still out on whether this bounce [in prices] has much further to run.”
Crude futures were hammered on Wednesday by official data showing another increase in US crude inventories, hitting 30-year highs. West Texas Intermediate shed nearly US$5, or almost nine percent in one day, echoing a price plunge in Brent that was the steepest since November last year.
Oil prices plunged by about 60 percent from their June peaks to a six-year low last week, largely owing to a surge in global reserves boosted by robust US shale production.
PRECIOUS METALS: Gold dropped further as the shine was taken off its status as a haven following positive US jobs data.
By Friday on the London Bullion Market, the price of gold dropped to US$1,241 an ounce from US$1,260.25 a week earlier.
Silver grew to US$17.22 an ounce from US$16.92.
On the London Platinum and Palladium Market, platinum increased to US$1,239 an ounce from US$1,221.
BASE METALS: Most industrial metals rose, with copper striking a two-week peak at US$5,755 per tonne as monetary policy easing in China stoked hopes of rising demand in the key commodity consumer.
By Friday on the London Metal Exchange, copper for delivery in three months rose to US$5,677 a tonne from US$5,468 a week earlier.
Three-month aluminum rallied to US$1,878.50 a tonne from US$1,863.50.
Three-month lead increased to US$1,860 a tonne from US$1,845.
Three-month tin declined to US$18,920 a tonne from US$19,250.
Three-month nickel gained to US$14,920 a tonne from US$14,720.
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