Sun, Oct 18, 2015 page15

• Oil claws back losses as US rig count dips, copper slides

  • AFP and BLOOMBERG, NEW YORK
  • • 
    • 
    • 

  Oil prices recovered a bit from a rough week on Friday as data showed a fresh dip in US oil exploration, suggesting lower output that could ease the global oversupply.

  US benchmark West Texas Intermediate (WTI) for delivery next month rose US$0.88 to US$47.26 a barrel on the New York Mercantile Exchange.

  Brent North Sea crude for December delivery, the global benchmark, closed at US$50.46 a barrel in London, a gain of US$0.73 from Thursday’s close.

  Both contracts had fallen for the first four days of the week, and, for the full week, WTI lost 4.8 percent and Brent was down 4.2 percent.

  “The global petroleum markets are holding at least moderate gains on end-of-week book squaring that has helped reverse at least some of the prior losses,” Tim Evans of Citi Futures said.

  “Sentiment has proven to be resilient, with at least some portion of the market arguing that a bottom has been established, with the ongoing physical surplus already discounted into the price,” he said.

  In a bullish sign for the market, the Baker Hughes weekly US oil rig count fell by 10, or 1.7 percent, this week, marking the seventh consecutive week of declines.

  That reinforced the outlook for lower US crude-oil production. On Thursday, the US Department of Energy reported that the nation’s output fell by 76,000 barrels to 9.17 million barrels per day.

  There was continuing market chatter about Russia eying production cuts.

  Bloomberg News reported on Thursday that Russian Energy Minister Alexander Novak said Moscow was prepared to discuss price ranges and output cuts when it meets with OPEC in Vienna on Wednesday.

  However, Commerzbank analyst Carsten Fritsch said there was only a “very slight” chance that the meeting would yield any concrete results.

  In the copper market, prices declined, posting their first weekly loss this month amid mounting concern over slowing consumption in China, the world’s largest user of the metal.

  Economists forecast Beijing would announce tomorrow that GDP last quarter grew at the slowest pace since 2009. Slowing expansion in China has pushed copper prices down 15 percent this year.

  “People are squaring their bets, expecting even weaker economic news coming out of China,” Michael Smith, president of T&K Futures & Options in Port St Lucie, Florida, said in a telephone interview. “A stronger dollar is also hurting commodities, given the currency’s inverse relationship with dollar-denominated assets.”

  Copper futures for delivery in December slipped 0.8 percent to settle at US$2.4035 a pound (2.2kg) at 1:18pm on the Comex in New York, leaving prices down 0.4 percent this week.

  On the London Metal Exchange, copper for delivery in three months lost 0.4 percent to US$5,285 a tonne. Aluminum, zinc and tin also declined, while nickel and lead rose.

  After gaining in recent weeks on expectations of monetary easing and supply cuts, copper’s “focus will eventually return to fundamentals, particularly the outlook for Chinese demand,” Yongan Futures Co senior analyst Zhang Yu said via telephone from Hangzhou, China.

  Inventories monitored by the London Metal Exchange have fallen 21 percent since the end of August to the lowest since February, while stockpiles in China’s bonded warehouses also dropped last month. The question is whether the metal is being stockpiled elsewhere or is being consumed, Zhang said.

  Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.
• Most Popular

  • 1

    German warships to pass through Strait

  • 2

    Sino-Russian air patrol designed to counter US

  • 3

    Court orders Ko Wen-je’s detention

  • 4

    Silicon photonics alliance formed

  • 5

    Ko Wen-je release quashed