Oil grabbed the attention last week in New York with the first move above the $US100 a barrel mark for the first time in four months
But two days after that happened, on expectations that a change in a major pipeline’s ownership and operation would drain the surplus of crude oil in the US Midwest and allow prices to rise closer to levels in Europe, the mini surge faded.
New York West Texas Intermediate crude for December delivery dropped $US1.41, or 1.4%, to settle at $US97.41 a barrel on Nymex on Friday.
For the week, crude fell $US1.58, or 1.6% to end the six week long rally.
The December contract expired Friday in New York and the new front month, January, fell $US1.26 to $US97.67.
In London, Brent oil for January settlement fell 66c, or 0.6%, to $US107.56 a barrel.
Brent’s premium to WTI rose 60c to $US9.89 a barrel.
The spread, which reached a record of $US27.88 on October 14, dropped to $US9.28 from $US13.02 on November 16 when the change of ownership in the pipeline and the reversal of the line’s flow southwards to the Houston area (i.e. instead of northwards) surprised the market.
The reversal will sharply lift the south flowing capacity of pipelines away from the Cushing delivery point in Oklahoma, a move that was seen as boosting US futures prices and draining some of the 32 million barrels of crude now stored in the area and depressing US futures prices.
Now traders are not as certain the change will have as big an impact as first thought, and the price gains will be slower to emerge.
Gold futures ended a rough week with a small gain of 0.3% on the day on Friday.
Comex gold for December delivery rose $US4.90, or 0.3%, to $US1,725.10 an ounce in New York.
That meant the weekly loss was a steep 3.5% after three weeks of gains.
The US dollar was slightly weaker on Friday, but the euro was weaker over the week.
Gold appeared to ignore the flow of solid data about the health of the US economy.
Fears about Europe continue to lurk in traders’ minds and they see losses and confusion in every utterance from eurozone about Italy, Greece, Spain, the European Central Bank and the euro.
Gold and silver should be in their element with the confusion and volatility coming out of Europe.
But every now and then a shudder goes through the market as fear levels peak, as they did on Wednesday in Europe, causing gold to slump sharply and dragging silver, copper and other metals with it.
Other metals traded higher Friday, with silver leading the pack.
December silver added 92c, or 2.9%, to end at $US32.42 an ounce.
But it still ended the week off 6.5%.
December copper finished at $US3.40 a pound, up 2c or 0.6% on the day, but still down around 4c or just over 1% for the week.
