Oil prices slid this week on waning prospects of an output freeze by producers to tackle a supply glut that shows no signs of ending as US crude inventories hit record heights.
After winning some support from a weaker US dollar that made crude priced in the US unit cheaper for holders of rival currencies, oil prices slumped on Friday following comments out of Saudi Arabia.
“The suggestion that Saudi Arabia will not freeze oil production if Iran doesn’t do the same, coupled with a stronger dollar, has taken a sledge hammer” to prices, said Jasper Lawler, an analyst at traders CMC Markets.
At about 4:30pm GMT, US benchmark West Texas Intermediate for delivery in May was down US$1.41 at US$36.93 a barrel compared with Thursday’s close.
Brent North Sea crude for June delivery shed US$1.57 to US$38.76 a barrel.
Both contracts were also down compared with one week earlier.
Bloomberg News on Friday reported that according to Saudi Arabia’s deputy crown prince, the kingdom should freeze its oil output only if mirrored by Iran and other major crude producers.
Oil prices are being hit in part owing to the return of Iranian crude to world markets after years of economic sanctions on Tehran were lifted following a nuclear deal last year.
Moreover, official data released on Wednesday showed that US commercial crude inventories climbed to a fresh record high last week, further underscoring concerns about a market brimming with supplies and not enough demand.
PRECIOUS METALS: Gold futures declined the most in more than a week after the US economy added more jobs than forecast lat month and wages picked up, reducing demand for the metal as a store of value.
The 215,000 gain in payrolls, according to a government report on Friday, compares with the 205,000 median forecast in a Bloomberg survey of economists. Average hourly earnings increased 0.3 percent from a month earlier, while the jobless rate edged up to 5 percent as more people entered the labor force.
Gold rose 17 percent in the first three months of the year, the biggest quarterly surge since 1986, as the US Federal Reserve kept rates steady after an increase in December.
Gold futures for June delivery fell 1 percent to settle at US$1,223.50 an ounce at 1:56pm on the Comex in New York. The metal ended the week unchanged.
In exchange-traded funds (ETF) and other metals: Holdings in ETFs backed by gold increased by 1 tonne on Thursday to 1,762.3 tonnes, according to data compiled by Bloomberg. Silver futures fell on the Comex, while platinum and palladium declined on the New York Mercantile Exchange.
BASE METALS: Aluminum had its best week in almost a year and zinc climbed for a third day as an unexpected jump in a factory gauge eased demand concerns in China, the world’s biggest consumer of industrial metals.
China’s manufacturing purchasing managers’ index showed improving conditions for the first time in eight months, suggesting government efforts at fiscal and monetary stimulus are kicking in. In warehouses tracked by the London Metal Exchange (LME), aluminum inventories shrank for a 13th straight session, the longest streak of declines since Feb. 12.
Aluminum for delivery in three months gained 1.1 percent to settle at US$1,536 a tonne at 5:50pm on the LME, taking the weekly gain to 4.1 percent, the biggest since May 1 last year. Zinc for delivery in three months climbed 3 percent to US$1,872, ending the week 4.3 percent higher.
Copper in London slipped 0.2 to US$4,835 a tonne, after swinging between a gain of 1 percent and a loss of 0.9 percent.
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