Global oil prices hit multimonth peaks on Friday on the back of the struggling US dollar and increasing geopolitical turmoil in the crude-rich Middle East, dealers said.
Brent North Sea crude for delivery in November added US$0.56 to stand at US$53.61 per barrel just after midday in London, having earlier hit US$54 — the highest since late August.
US benchmark West Texas Intermediate for delivery in November won US$0.96 to US$50.39 per barrel compared with Thursday’s close. The contract had earlier touched a 2.5-month peak at US$50.58.
“Oil prices are continuing to rise, as they have been in recent days,” Commerzbank analyst Carsten Fritsch said. “Increased risk appetite coupled with a weaker US dollar is giving tailwind to the oil prices. In addition, some market observers have made optimistic remarks about the future development of the market.”
The flagging greenback makes dollar-priced oil cheaper for buyers using stronger currencies, which tends to stimulate demand and prices.
Meanwhile, Russia continued to launch airstrikes in Syria in support of Syrian President Bashar al-Assad.
“Russia’s military intervention in support of Assad has finally turned the war in Syria into a proxy war between the world powers, which significantly increases the geopolitical risks,” Fritsch added.
Crude futures also climbed on Friday on hopes that increasing demand and declining US crude production would ease a supply glut.
PRECIOUS METALS: Gold advanced to a six-week high as minutes of the Federal Reserve’s latest meeting increased speculation that the central bank will hold off raising interest rates until next year.
The odds of a rate increase this year have dropped in the past month and traders and analysts surveyed by Bloomberg are the most bullish on gold in three weeks.
Signs that US growth may be slowing have helped gold rebound almost 8 percent from a five-year low set in July, even as Fed Chair Janet Yellen has said the central bank still expects to raise rates this year.
Higher borrowing costs curb the appeal of bullion, which does not pay interest or give returns like other assets such as bonds and equities.
Gold futures for December delivery advanced 1 percent to settle at US$1,155.90 an ounce at 1:47pm on the Comex in New York, after touching US$1,159.30, the highest since Aug. 24. Prices are up 1.7 percent this week.
Platinum futures climbed for a sixth day, the longest rally since April last year. Palladium and silver also advanced.
BASE METALS: The price of zinc rebounded sharply this week after troubled Swiss mining giant Glencore PLC slashed its output by one-third, in a “significant” tightening of supplies, traders said.
The industrial metal rallied to a two-month pinnacle at US$1,875 per tonne in Friday morning deals, up 12 percent from the closing level the previous day. By late Friday on the LME, zinc for delivery in three months spiked to US$1,843 a tonne from US$1,692 a week earlier.
Three-month copper rose to US$5,298 a tonne from US$5,122. Three-month aluminium increased to US$1,611.50 a tonne from US$1,560. Three-month lead advanced to US$1,781 a tonne from US$1,655. Three-month tin climbed to US$16,005 a tonne from US$15,530. Three-month nickel rebounded to US$10,530 a tonne from US$10,035.
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