Oil pared a weekly advance as investors weighed the return of output from Canadian producers against global supply reductions from Nigeria to the US.
Futures dropped 1.1 percent in New York, trimming the week’s gains to 3.5 percent. Companies including Enbridge Inc are resuming operations in Alberta, Canada, after wildfires curbed operations. Militant attacks have cut output in Nigeria to the lowest in 20 years. Exxon Mobil Corp. invoked a legal clause allowing it to suspend shipments of Qua Iboe crude from Nigeria without breaching contracts.
“There is no question the main driver is mounting outages in Nigeria,” Michael Wittner, head of oil market research at Societe Generale SA, said by telephone. “That’s high-quality, light, sweet crude. The other big story of the week, which partly offsets Nigeria, is that the situation in Alberta seems to be getting better. The market is definitely weighing the two against each other.”
Photo: Scott Terrell/Skagit Valley Herald via AP
West Texas Intermediate (WTI) for June delivery declined US$0.49 to settle at US$46.21 a barrel on the New York Mercantile Exchange. Prices posted a gain this week after last week’s decline. Brent for July settlement fell US$0.25, or 0.5 percent, to end the session at US$47.83 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a 93-cent premium to July WTI.
PRECIOUS METALS: Gold posted its first weekly loss since last month, as US retail sales pointed to an improving economy, reducing demand for the metal as a haven.
US purchases at retailers last month increased by the most in a year, indicating consumer spending could help shore up economic growth after an early-year slowdown. A strengthening US dollar also reduced demand for bullion as an alternative asset.
The retail sales data may strengthen the case for the US Federal Reserve to raise interest rates, undercutting a driver of this year’s rally in gold. Bullion has gained 20 percent this year, as traders pared back expectations for the pace of monetary tightening, boosting the metal’s appeal against interest-bearing assets. Two regional Fed chiefs on Thursday said the central bank risks stoking an asset bubble by delaying action for too long.
Gold futures for June delivery gained 0.1 percent to settle at US$1,272.70 an ounce at 1:47pm on the Comex in New York, dropping 1.6 percent for the week, the first such decline since April 22.
Holdings in bullion-backed exchange-traded products increased for a 13th day on Thursday, data compiled by Bloomberg show. Assets rose 3.7 tonnes, the highest since December 2013.
In other precious metals, silver futures for July delivery climbed 0.2 percent to US$17.132 an ounce on the Comex. On the New York Mercantile Exchange, platinum and palladium declined.
BASE METALS:As the industrial metals rally wavers amid renewed concerns on Chinese demand, zinc is proving resilient.
Glencore PLC, the world’s largest miner of the metal, said this week that structural deficits were returning “due to resource quality and scarcity at current prices.” Zinc inventories in London dropped on Friday to 390,375 tonnes, the lowest since July 2009. Prices have jumped 17 percent this year, leading gains in industrial metals, after sliding 26 percent last year.
Zinc for delivery in three months gained 1 percent to settle at US$1,889 a tonne at 5:50pm on the London Metal Exchange (LME).
The price advanced 0.1 percent this week, while a gauge of the six main metals traded on the LME lost 3.5 percent, as aluminum, copper, lead, nickel and tin declined.
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