Oil prices rallied to two-month high points on Friday on hopes that producers will shortly strike a deal to tackle a global supply glut.
Positive US jobs data handed a further boost to crude futures and commodity prices in general, which enjoyed a strong week overall as gold hit a 13-month peak at US$1,164 an ounce.
The pick-up in oil prices this week comes after crude recently wallowed near 13-year lows below US$30 a barrel, also owing to a strong US dollar and tepid demand growth.
Photo: Bloomberg
Brent North Sea crude reached US$38.72 a barrel on Friday — the highest level since early January. US benchmark West Texas Intermediate hit a two-month high of US$35.94.
“The price rise was boosted by reports of declining supply” from OPEC and the US, Commerzbank analyst Carsten Fritsch said. “What is more, efforts are ongoing to persuade other countries to cap their oil production, as Saudi Arabia, Russia, Venezuela and Qatar [have] agreed to do.”
Nigeria on Thursday said key crude producers plan to meet this month in Russia to discuss a proposed output freeze.
Nigerian Minister of Oil Emmanuel Ibe Kachikwu predicted there would be a “dramatic price movement” after the March 20 gathering, Bloomberg News reported.
Crude has picked up recently following speculation over plans by major oil producers including OPEC kingpin Saudi Arabia to cap output. Nigeria is also a part of the cartel, while major oil producers Russia and the US sit outside OPEC.
Concerns about the oversupplied market were eased this week as US government data showed oil production falling to about 9 million barrels per day.
PRECIOUS METALS: Gold cruised to a bull market, heedless of rebounding stock markets, as traders expect central banks to curb yields on other investments in an effort to spur economic growth.
The metal is up more than 20 percent since a December low, the common definition of a bull market, outpacing all major assets. Gold was little changed on Friday as investors weighed a surge in US payrolls against an unexpected decline in wages.
Prices rose 0.1 percent to US$1,265.69 an ounce at 9am, according to Bloomberg generic pricing.
Bullish sentiment in gold is reflected in exchange-traded funds. Investors raised holdings in gold-backed ETFs by 259 tonnes so far this quarter, which would be the biggest quarterly gain since June 2010.
Holdings are rising after three straight years of withdrawals.
Growth in US service industries slowed for a fourth month last month, prompting the first job cuts in two years, according to a report by the Institute for Supply Management.
A report on Friday showed US employers added more workers last month than projected, but wages unexpectedly declined, dashing hopes that reduced slack in the labor market was starting to benefit all Americans.
Open interest, a tally of outstanding contracts in Comex futures, rose to the highest since 2012.
Gold futures for delivery next month climbed 0.6 percent to US$1,266 an ounce on the Comex in New York.
BASE METALS: Copper extended its climb to the highest level in almost four months on continued optimism that policymakers in China will unveil more measures to bolster growth in the largest consumer of metals.
The metal used in power cables and air-conditioners rose 1.4 percent to US$4,921.50 a tonne on the London Metal Exchange by 2:50pm in Beijing, the highest since Nov. 12 last year, and is up 4.6 percent this week, the biggest such advance since Sept. 11.
Base metals have rallied before yesterday’s start to China’s National People’s Congress, where delegates will sign off on a new five-year economic plan, and as global equities climb.
The LME index of six industrial metals has rebounded 4.9 percent this year, after three years of losses spurred by concern that weakening growth in China would undermine demand and exacerbate gluts.
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