Oil prices remain the focus of the current global sell-off in financial markets and there’s no reason to think there will be any change in the holiday-shortened trading week in the US.
The final lot of Chinese economic data, especially the all important GDP figures, are out tomorrow, meaning those fears about the health of the Chinese economy will remain at the forefront of investors lists of worries.
Last week’s slide in oil prices was as dramatic as the week before and the commodity has now lost more than 20% in value in two weeks – against a 24% slide for all of December.
Oil futures in the US and Europe settled below the key $US30-a-barrel level on Friday to take losses for the week as high as 14%.
Adding to market fears on Friday was the looming ending of sanctions on Iran, possibly as early as this weekend. A deal would see half a million barrels of Iranian oil coming onto the market in the next few months, adding to the global surplus.
February West Texas Intermediate crude futures fell $US1.78, or 5.7%, to settle at $US29.42 a barrel on the New York Mercantile Exchange, after touching a low at $US29.13 in trading on Friday night.
That was the lowest the price has been since November 2003, and it lost roughly 11.3% for the week.
In London, March Brent oil lost $US1.94, or 6.3%, to $US28.94 a barrel, for a weekly loss of more than 14%. Prices settled at their lowest level since February 2004.
The weekly Baker Hughes survey on Friday showed that the number of US drilling rigs fell by just one last week to 515. That had no impact and traders are still worried by rising stocks of oil and products like petrol, diesel and gas.
February US natural gas futures lost 3.9 cents, or 1.8%, to $US2.10 per million British thermal units, after showing a drop of 5.7% on Thursday. For the week, prices slid 15% on weaker demand and a weak outlook because of the warm winter in much of the US.
Not even gold could manage two up-weeks in a row.
Comex gold futures settled higher on Friday, up $US17.10, or 1.6%, to settle at $US1,090.70 an ounce.
But prices still fell 0.7% for the week after a rally in the first full week of the new year lifted prices by 3.6%, which is quite a turnaround given the volatility seen last week. Still, the rise on Friday was again a solid bull point for gold given the instability in other markets, especially oil.
Silver prices also got a safe-haven related boost on Friday, dragged along in the wake of gold. Comex March silver added 14.8 cents, or 1.1%, to $US13.896 an ounce but also, like gold, still ended the week lower – this time by 0.2%.
And Comex March copper fell by 3.3 cents, or 1.6%, to $US1.944 a pound on Friday, pulling back after a 1% gain on Thursday. For the week, the loss was a painful 3.9%.
