World oil prices on Friday fell after a dismal US jobs report added to worries about weak global economic growth and slow growth in crude demand.
Also adding to the downward pressure was the first rise in months in the number of oil drilling rigs deployed in the US, suggesting that the recent rebound in crude prices could lead to higher US output.
US benchmark West Texas Intermediate for delivery next month finished down US$0.55 at US$48.62 a barrel.
The London Brent contract for August delivery fell US$0.40 to close at US$49.64.
Prices held steady in early trade, despite the failure of OPEC to take action to shore up prices in its semi-annual meeting in Vienna on Thursday.
However, a surprisingly poor US employment report for last month, with the number of monthly jobs added only one-quarter of what was expected, took the wind out of the crude trade.
A drop in the US dollar of more than 1.7 percent against the euro and 2 percent on the yen failed to shore up buying as well.
Also weighing was the lifting of the force majeure declaration on ExxonMobil exports in OPEC member Nigeria, which “may hint at a recovery in overall Nigerian supplies,” Tim Evans at Citi Futures said.
“A rebound to a more typical 2.0 million barrels a day in production would likely push OPEC total output to 33.0 million barrels a day or more, delaying the rebalancing of the global market,” he added.
Meanwhile, the Baker Hughes weekly North American rig count, which helps measure exploration and production activity, rose for the first time in months after hitting a multi-decade low.
It showed an increase of nine onshore oil drilling rigs in the US, a possible reaction to the lure of higher crude prices.
A steady fall in US oil production, by more than 800,000 barrels a day since one year earlier, has paralleled the sharp pullback of drilling rigs active in the US oil field.
PRECIOUS METALS: Gold has been rescued by US payrolls. Again.
Gold had the biggest gain in 11 weeks after the US added the fewest workers in almost six years, weakening the case for the US Federal Reserve to raise interest rates.
Before the jobs report on Friday, a gauge of volatility in bullion fell to an almost four-month low, and the volume of US futures this week was the least since the start of the year.
Mining shares rose.
Bullion is coming off of its biggest monthly loss since November last year after signs of an improving US economy spurred speculation that the US Fed could tighten monetary policy as soon as this month.
Higher rates curb bullion’s appeal against interest-bearing assets. Those bets retreated on Friday, with the odds of a rate rise this month dropping to 4 percent, from 30 percent a week ago, according to US Fed funds futures.
“It’s a pretty bad number,” RJO Futures senior market strategist Bob Haberkorn said in a telephone interview, referring to the jobs report. “It takes the Fed rate increase pretty much off the table for June.”
Gold futures for August delivery jumped 2.5 percent to settle at US$1,242.90 an ounce at 1:45pm on the Comex in New York, marking the biggest gain for a most-active contract since March 17. Trading was 14 percent above the 100-day average for this time, data compiled by Bloomberg showed.
A gauge of 14 senior global gold producers tracked by Bloomberg Intelligence climbed 8.3 percent, poised for the biggest rally since Dec. 16, last year.
BASE METALS: Zinc rose for a seventh session in its longest rally in almost two years, while copper and other industrial metals advanced as an increase in US factory orders helped boost demand prospects.
Zinc, used for rustproofing steel in everything from auto bodies to suspension bridges, is outperforming other metals, as banks from Goldman Sachs Group Inc to Macquarie Group Ltd anticipate gains on prospects for a shortage. Bookings at US factories rose 1.9 percent in April, up from 1.7 percent in March, with durable-goods orders gaining, showed government data on Friday.
Zinc for delivery in three months gained 0.5 percent to settle at US$1,992 a metric tonne at 5:51pm on the London Metal Exchange (LME). Prices earlier reached US$2,013, the highest since July last year, and are up more than 5 percent this week.
Copper gained 1.7 percent to US$4,688 a tonne on the LME, after falling in the past three days. Copper stockpiles in warehouses tracked by the Shanghai Futures Exchange fell for a fourth week to the lowest since Jan. 21.
Aluminum inventories monitored by the LME slumped for a 56th day, the longest streak since 2000. Aluminum, nickel, lead and tin climbed on the LME.
On the COMEX in New York, copper futures for delivery next month also advanced.
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