Sun, Dec 06, 2015 page15

• Oil sinks as OPEC sticks to output; gold, copper climb

  • Bloomberg and AFP, NEW YORK
  • • 
    • 
    • 

  Oil prices sank on Friday as OPEC decided not to cut output despite the global oversupply that is battering the market.

  The 13-member cartel, which pumps about 40 percent of the world’s crude oil, took no action to shore up the market and observers said it appeared to be in disarray after meeting in Vienna.

  The hands-off decision pushed US oil back below US$40 a barrel, after closing at the level on Wednesday for the first time since August.

  US benchmark West Texas Intermediate tumbled US$1.11, or 2.7 percent, to US$39.97 a barrel on the New York Mercantile Exchange.

  International benchmark Brent North Sea crude for January delivery fell to US$43 a barrel in London, down US$0.84 (1.9 percent) from Thursday’s settlement.

  “The market did not take the announcement out of OPEC very well today as OPEC appears to really be in disarray among its members and they took the path of least resistance, which was to do nothing and wait to see if things get better,” Andy Lipow of Lipow Oil Associates said.

  With OPEC countries producing an estimated 32 million barrels per day, above the group’s agreed target of 30 million barrels, and with Iran expected to resume substantial exports next year, hopes were that the group would take steps to lower supplies.

  However, breaking from recent practice, it published no figures on output in its post-meeting statement and put off a production reassessment to its next meeting on June 2 next year.

  Meanwhile, gold traders are taking the long view, spurring enough optimism in the market to drive the biggest price gain since April and make miners some of the best performing stocks.

  While a government report showing gains for US jobs reinforced expectations that the Federal Reserve would raise interest rates this month, bullion investors saw past the headline numbers.

  The underemployment rate crept higher, reflecting a rise in the number working part-time for economic reasons, one of Fed Chair Janet Yellen’s favorite measures of labor-market slack. That spurred hope for gold bulls that the pace of tightening will be slow.

  Gold hopefuls have been beaten down for most of the year, with prices touching a five-year low this week on the outlook for higher US rates that cut the appeal of the metal because it does not pay interest. However, some traders are starting to speculate that the gain for borrowing costs is already factored into the market. Prices surged as much as 2.6 percent on Friday, the biggest intraday gain since April 27, while Newmont Mining Corp was the biggest gainer on the S&P 500 Index.

  Gold futures for February delivery gained 2.2 percent to settle at US$1,084.10 an ounce at 1:48pm on the Comex in New York. Prices touched US$1,045.40 on Thursday, the lowest since 2010.

  Silver futures for March delivery climbed 3.2 percent to US$14.528 on the Comex, the biggest gain in two months. On the New York Mercantile Exchange, platinum futures for January delivery increased 3.9 percent to US$880.60 an ounce, the biggest gain since June 2012, while palladium futures for March delivery jumped 5.6 percent to US$566.85 an ounce.

  Copper futures gained this week for the first time since October on US job gains, boosting demand prospects.

  Copper snapped the longest streak of weekly losses in two years, which came as concern mounted over slowing global economies. The US is the biggest user of the metal after China.

  Copper futures for March delivery added 0.9 percent to settle at US$2.079 a pound (0.45kg) at 1:13pm on the Comex, capping the first weekly gain since Oct. 9.

  Stockpiles of copper tracked by the London Metal Exchange (LME) dropped to 237,625 tonnes, the lowest since January.

  Copper for delivery in three months on the LME climbed 1.2 percent to US$4,612 a tonne. Lead, nickel, tin and zinc also advanced in London. Aluminum rose 3.9 percent this week, the biggest such increase since May.
• Most Popular

  • 1

    Hsieh keeps Wimbledon title hopes alive

  • 2

    CWA issues warnings about Tropical Storm Danas

  • 3

    Indigenous Kuskus Village exhibition opens in Taipei

  • 4

    Nagasaki to invite Taiwan to atomic bomb memorial

  • 5

    Army establishes HIMARS company