Global commodity markets had mixed fortunes this week, but Brent oil fell on the back of soaring US crude reserves and an improving supply outlook, while traders braced for uncertainty from Italian political deadlock, US budget cuts and the death of former Venezuelan president Hugo Chavez.
OIL: World crude prices were hit by the strong dollar, surging US reserves and stubborn concerns over a prolonged budget stalemate in Washington, but finished the week on a stable note.
“Oil prices have slid back this week on a combination of rising US inventories, disappointing prospects for European growth and a stronger US dollar,” CMC Markets analyst Michael Hewson said.
New York oil prices wobbled on Wednesday after the US Department of Energy revealed that US crude stockpiles surged by more than eight times the expected amount, indicating weak demand.
Crude reserves soared 3.8 million barrels in the week ending on March 1, according to the department. That was far more than market expectations for a modest gain of 500,000 barrels.
Brent oil was held back by news of improving supplies as supply resumed from the Buzzard oil field in the North Sea, as a key pipeline returned to service.
Earlier in the week, oil had won brief support from uncertainty after the death of Chavez, the late president of major Latin American crude producer Venezuela. Chavez, 58, died on Tuesday after a long battle with cancer.
Markets also reacted to ongoing political limbo in debt-ridden Italy, where inconclusive elections have fanned concerns about a return to the eurozone debt crisis.
On Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery next month dipped to US$110.03 per barrel from US$110.35 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude next month firmed to US$91.21 per barrel compared with US$90.60.
PRECIOUS METALS: Gold drifted lower, but other precious metals gained in value, with traders reacting to positive Chinese economic trade data and the improving global economic backdrop, analysts said.
By late Friday on the London Bullion Market, the price of gold edged down to US$1,581.75 an ounce from US$1,582.25 a week earlier.
Silver rose to US$28.78 an ounce from US$28.01.
On the London Platinum and Palladium Market, platinum increased to US$1,588 an ounce from US$1,579.
Palladium climbed to US$769 an ounce from US$721.
BASE METALS: Base metal prices diverged within a narrow band, despite many global stock markets striking impressive peaks on mounting global economic optimism, dealers said.
By late Friday on the London Metal Exchange, copper for delivery in three months rose to US$7,741 a tonne from US$7,722 a week earlier.
Three-month aluminum drifted upwards to US$1,967 a tonne from US$1,964.
Three-month lead fell to US$2,202 a tonne from US$2,247.