Oil prices turned lower in late trade on Friday as hopes fizzled for a fix in the global oversupply that could support prices.
Prices had jumped on Thursday after Venezuela raised expectations that it and other major producers would meet next month to try to find ways to stabilize the market.
The US benchmark West Texas Intermediate for delivery in April fell US$0.29 to US$32.78 a barrel on the New York Mercantile Exchange.
Photo: EPA
In London, Brent North Sea crude for April delivery, the European benchmark for oil, dropped to US$35.10 a barrel, down US$0.19 from Thursday’s settlement.
Oil prices climbed sharply in morning trade after US economic growth data for the fourth quarter was upwardly revised to a 1 percent annual rate, much better than expected, but the spike was short-lived.
Kyle Cooper at IAF Advisors said that the market had “gone too far” with a nearly 12 percent gain in the WTI April contract from Friday last week through Thursday.
A big catalyst had been Venezuelan Minister of Oil Eulogio Del Pino’s comments on Thursday suggesting output talks by major producers would take place next month.
Venezuela, along with OPEC members Saudi Arabia and Qatar and non-OPEC Russia, last week announced a preliminary deal to freeze output at last month’s levels, provided that other major producers followed suit.
Saudi Arabia, OPEC’s largest oil producer, has ruled out a production cut and Iran has dismissed the idea it could join a freeze.
“The hype behind the headlines about freezing oil production doesn’t appear very factual,” Cooper said.
In the US, the number of active oil rigs dropped by 13 this week to 400, down 75 percent from the 2014 peak, oil service provider Baker Hughes said on Friday.
“Drilling activity in the US is currently at its lowest ebb since December 2009,” Commerzbank said. “It is therefore clear that US oil production will continue to decline.”
PRECIOUS METALS: Gold headed for a second straight weekly drop for the first time this year as the US economy expanded faster than estimated in the fourth quarter, damping demand for a haven.
The US’ GDP grew at a 1 percent annualized rate, topping an initial estimate of 0.7 percent, US Department of Commerce figures showed on Friday.
The median forecast in a Bloomberg survey called for a 0.4 percent gain. Improving economic conditions spurred speculation that the US Federal Reserve could have reason to raise interest rates again, cutting the appeal of bullion as a store of value.
The US dollar headed for a weekly rally.
“We had a bit of a stronger than expected print on GDP, and it looks pretty decent in the headlines,” Toronto-based TD Securities head of commodity strategy Bart Melek said in a telephone interview. “Gold adjusted modestly lower, and it probably also responded to the US dollar.”
Gold futures for April delivery slid 1.8 percent to US$1,217 an ounce at 11:33am on the Comex in New York. Prices are down 1.1 percent this week, following a 0.7 drop last week.
The metal is still up 9 percent this month, heading for the biggest monthly gain since 2012. Gold has been the top performing commodity this year as volatility in equity and currency markets stoked demand for haven assets.
Holdings in exchange-traded products backed by bullion are at the highest in a year, data compiled by Bloomberg show.
The assets increased for the past 11 days.
Silver futures for May delivery lost 2.9 percent to US$14.755 an ounce on the Comex.
On the New York Mercantile Exchange, platinum also declined, while palladium gained.
BASE METALS: Copper futures rose to a three-month high and Freeport-McMoRan Inc headed for the biggest-ever monthly increase as concerns eased on economic growth prospects in China and the US, the world’s top consumers of the metal.
The economy in China, the biggest copper user, remains strong and its structure and quality are improving, People’s Bank of China Governor Zhou Xiaochuan (周小川) said in a speech in Shanghai on Friday.
A report the same day showed US consumer purchases climbed last month by the most in eight months, indicating the biggest part of the US economy gained momentum at the start of the year.
Copper, which has posted three straight annual losses, posted a second straight weekly advance.
“Some of that bearish sentiment is pulling back a little bit,” Chicago-based Long Leaf Trading Group Inc chief market strategist Tim Evans said in a telephone interview. “This could be potentially the start of bullish price action if we get other numbers to support growth here in the near to immediate term.”
Copper futures for May delivery advanced 2.5 percent to settle at US$2.125 a pound on the Comex in New York, after touching US$2.164, the highest since mid-November last year.
On the London Metal Exchange (LME), aluminum, copper, lead, nickel tin and zinc rose.
Immediate-delivery aluminum traded at a premium of US$17 a tonne to the three-month contract, after settling Thursday at a US$17.75-a-tonne premium. One party held 50 percent to 79 percent of available stockpiles and short-dated contracts on the LME as of Feb. 24, and stockpiles tracked by the exchange are near the lowest level since 2009.
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Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
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