The oil market scored modest gains on Friday, ending a turbulent month that drove prices sharply lower amid worries about the global crude oversupply.
Speculation that Russia and OPEC will meet to discuss oil output cuts to push up prices supported sentiment for a second day, analysts said.
US benchmark West Texas Intermediate for delivery in March rose US$0.40 to US$33.62 a barrel on the New York Mercantile Exchange, after advancing almost US$3 over the three prior trading sessions.
Photo: Reuters
In London, Brent North Sea for March finished at US$34.74, adding US$0.85 from Thursday’s settlement and about US$2.50 over the week.
The oil market managed a second straight week of advances after having sunk to 12-year lows early this month.
Despite those gains, WTI finished the month down about 9 percent and Brent nearly 7 percent.
Mike Lynch of Strategic Energy and Economic Research said there was “no strong reason” for Friday’s lift in prices.
“The talk of Russia and OPEC maybe meeting and working out a production cut has made people think we’ve reached a bottom and it’s time to buy back in the market,” Lynch said.
According to Russian news agency reports Thursday, Russian Minister of Energy Alexander Novak said Moscow is ready to discuss “coordinating” with OPEC and mutual production cuts of up to 5 percent.
However, the news drew skepticism that such a meeting or agreement would take place.
Novak “said they had been approached by Venezuela about a potential meeting, but that was the extent of it, while senior OPEC delegates were dismissive,” Matt Smith of ClipperData said.
However, Price Futures Group analyst Phil Flynn said the mere talk of a Russia-OPEC meeting was shifting sentiment higher.
Meanwhile the number of active oil drilling rigs in the US fell by 12 this week to 498, compared with 1,223 a year ago.
PRECIOUS METALS: For most commodity investors, this month was one more bad month in a years-long bear market. Gold was an exception.
Gold futures rallied 5.3 percent this month, the best gain in a year. The returns were far better in mining stocks, with an index of South African producers jumping 35 percent for the month, the most since at least 1995.
Turmoil in Chinese financial markets, plunging oil prices and signs of softening US growth left investors reeling this month, boosting demand for traditional safe-haven assets like gold. Rising bets that the US Federal Reserve will hold off on further interest-rate increases added to the appeal of bullion. While losses deepened in other metals, gold outperformed and holdings in exchange-traded funds backed by the metal rose to the highest since November.
“Interest-rate jitters going forward are what brought gold up,” James Cordier, the founder of Optionsellers.com in Tampa, Florida, said in a telephone interview. “With stock markets crashing all over the world and the US economy growing slowly, nothing is pointing to more rate hikes, and that’s why gold is rallying.”
Gold futures for April delivery rose less than 0.1 percent to settle at US$1,116.40 an ounce at 1:48pm on the Comex. The gain for the month was the biggest since January last year.
This week, platinum futures rallied 5.1 percent, the most in almost two months. The market will stay in a shortage in the next six years as supplies remain constrained amid growing or robust demand from jewelers and car companies, according to a report commissioned by the World Platinum Investment Council.
Silver futures for March delivery climbed 0.1 percent to US$14.243 an ounce on Friday on the Comex. The metal advanced 3.2 percent this month.
BASE METALS: Industrial metals slumped this month as concern over China’s economy outweighed optimism about any supply cuts.
The Bloomberg Industrial Metals Subindex fell 1.4 percent this month, the eighth drop in nine months, as turmoil in Asian equities deepened concerns over the economy in China, the world’s biggest consumer. Copper futures slid 3.2 percent during the month.
Even as companies including Freeport-McMoRan Inc. and Glencore PLC have taken steps to reduce production, metal prices have kept falling on speculation that cuts have not gone deep enough to erode global gluts. Energy prices have declined, and the depreciation of the yuan and other emerging-market currencies is also lowering output costs in many nations, prompting concern that some unprofitable plants will be able to hold on longer.
On the Comex, copper futures for March delivery added 0.8 percent to settle at US$2.067 a pound at 1:15pm. in New York. Prices touched US$1.9355 this month, the lowest since 2009.
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