Oil capped the biggest weekly decline since August as expanding US crude stockpiles exacerbate a global glut.
West Texas Intermediate crude fell to a three-week low, widening its discount to Brent.
US inventories expanded for a fourth week through Oct. 16, keeping supplies more than 100 million barrels above the five-year seasonal average, the US Energy Information Administration said.
Crude dropped even after China cut interest rates to help prop up its slowing economy.
Oil failed to sustain a rally above US$50 a barrel earlier this month amid signs the global surplus will drag out longer as OPEC pumps above its target and Iran prepares to raise exports once sanctions are lifted. Doubts about the strength of demand growth in China added to the pressure on commodity prices.
“We should continue to see these large builds and additional supplies,” said James Cordier, founder of Optionsellers.com in Tampa, Florida. “It’s going to be difficult to build the bullish case.”
WTI for December delivery dropped US$0.78, or 1.7 percent, to end at US$44.60 a barrel on the New York Mercantile Exchange, the lowest since Sept. 28. Prices are down 5.6 percent this week, the most since the five days ended Aug. 7.
Brent for December settlement fell US$0.09 to US$47.99 a barrel on the London-based ICE Futures Europe exchange, down 4.9 percent for the week. The European benchmark crude closed at a premium of US$3.39 to WTI, the widest since Oct. 8.
The US oil rig count slid by 1 this week to 594, adding to the 80 sidelined in the previous seven weeks and extending a five-year low, Baker Hughes Inc said.
Crude also fell as the dollar strengthened, reducing oil’s investment appeal.
PRECIOUS METALS: Gold climbed by the most in more than a week after the European Central Bank (ECB) signaled it might boost monetary stimulus and China announced interest rate cuts.
Futures advanced as much as 1.1 percent to US$1,178.90 an ounce after China cut its benchmark lending rate and reserve requirements for banks, stepping up efforts to bolster the economy.
On Thursday, markets took ECB President Mario Draghi’s comments that policymakers wanted to be “vigilant” as a signal that additional easing was coming as soon as December.
That weakened the euro against the US dollar and has helped send bullion priced in the European currency to the highest in three months.
Gold has risen 5.6 percent this month as patchy economic data spurred traders to push back expectations for a US rate increase to next year. While Goldman Sachs Group Inc put the probability of a move in December at about 60 percent, Fed-fund futures show odds of 36 percent for an increase this year. Higher borrowing costs curb the appeal of gold because it does not give returns like bonds or equities.
“News of a rate cut in China is helping support investor sentiment and precious metals,” Amsterdam-based ABN Amro Bank NV strategist Georgette Boele said. “Gold central bank easing makes gold as a low yielding asset more attractive.”
Silver for December delivery added 1.2 percent to US$16.03 an ounce in New York. Platinum was up 0.4 percent and palladium gained 2.2 percent.
SUGAR: Sugar prices fell from the highest level in more than eight months as traders sought to take profit before the end of the week on gains partly spurred by declining output in the main growing region in Brazil, the world’s largest producer.
The commodity traded in New York fell as much as 1.1 percent after rising to the highest since Feb. 19 earlier on Friday and gaining 3 percent on Thursday. Traders sought to secure earlier gains, according to Societe Generale SA in New York, even as data from lobby Unica showed output in Brazil’s center-south fell 12 percent in the first half of the month.
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