Oil prices endured a volatile week and metals futures fell as the US dollar strengthened and Chinese economic data disappointed markets.
OIL: World oil prices edged higher, with Brent crude recovering from a two-year low point forged against a backdrop of solid supplies and dampening demand growth.
“Brent is trading somewhat more firmly than a week ago after some extremely volatile days of trading,” Commerzbank analysts said in a note to clients.
European benchmark Brent began the week by sliding to US$96.21 a barrel, which was the lowest level since July 2012.
However, oil prices rebounded sharply on Tuesday after the head of OPEC indicated that the crude producers’ cartel could cut its production target for next year. They headed south again a day later as a US crude stockpiles report showed a weekly surge of 3.7 million barrels instead of the 1.2-million barrel decline expected by the market.
“The market is unfazed by the prospect of cuts to OPEC production due to oversupply in Europe and Asia and a strong dollar, which has also dampened demand by rendering Brent crude oil more expensive when expressed in foreign currency terms,” Chloe Bradley, an analyst at energy consultancy Inenco, said on Friday.
A stronger US dollar added downward pressure this week to oil prices, which are traded in the US unit and become more costly for buyers using weaker currencies.
The greenback rose after the US Federal Reserve stuck to its timetable on hiking US interest rates, but indicated it could eventually rise more sharply than initially envisaged.
Oil traders also focused on the Scottish referendum owing to the presence of large reserves in the North Sea off the coast of Scotland.
Scots rejected independence in a vote on Thursday that left the centuries-old UK intact, but headed for a major shake-up that will give more autonomy to both Scotland and England.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in November stood at US$97.76 a barrel compared with US$97.08 for the expired October contract one week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for October gained to US$92.85 a barrel compared with US$92.65.
PRECIOUS METALS: Gold struck an eight-month low and silver a four-year trough as the US dollar gained strength.
“Gold hit an eight-month low after the Fed hinted at a sooner-than-expected interest rate rise,” IG trading group said in a client note.
A stronger greenback makes dollar-priced gold and commodities more expensive for buyers using weaker currencies.
Gold on Friday dropped to US$1,214.27 an ounce — the lowest level since January. At the same time, sister-metal silver hit US$17.85 an ounce, the lowest since August 2010.
By late Friday on the London Bullion Market, the price of gold had slipped to US$1,219.75 an ounce from US$1,231.50 a week earlier. Silver decreased to US$18.45 an ounce from US$18.64.
On the London Platinum and Palladium Market, platinum reversed to US$1,344 an ounce from US$1,360.
Palladium eased to US$823 an ounce from US$829.
BASE METALS: Base or industrial metal prices fell across the board for a second week running.
Prices started downbeat “after disappointing economic data were published at the weekend in China,” Commerzbank analysts said in a note to clients.
China reported that its industrial production stuttered last month, adding to concerns about weakening growth in the world’s second-largest economy even after the government’s stimulus measures.
By Friday on the London Metal Exchange, copper for delivery in three months fell to US$6,814 a tonne from US$6,835.75 a week earlier.
Three-month aluminum slid to US$1,982 a tonne from US$2,050.50. Three-month lead declined to US$2,074 a tonne from US$2,122, three-month tin fell to US$21,210 a tonne from US$21,220 and three-month nickel slid to US$17,836 a tonne from US$18,490.
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