So where will oil go this week after last week’s big slide and even bigger rebound?
Analysts are even more uncertain than they were last week.
They can’t decide if the trading of last week marked a base for the commodity to rally from, or whether we saw an intense bounce on Thursday and Friday driven by bears forced into cover short positions after prices rose sharply, or whether it was a ‘dead cat bounce’ or a massive relief rally which will puncture easily.
Nymex US oil futures for March surged 13.5% on Thursday and Friday, erasing nearly half the losses racked up since the start of the year as bearish traders cashed out or were forced to cover their shorts.
Oil futures jumped 9% on Friday alone to settle at their highest level in two weeks. March West Texas Intermediate crude futures added $US2.66, or 9.2%, to settle at $US32.19 a barrel in New York.
That meant for the week, US crude futures jumped 9.4% for the February contract, which expired on Wednesday. The new front month March contract was up nearly 6% from its settlement a week ago.
In London Brent crude soared rose $US2.93, or 10%, to $US32.18 a barrel for a weekly gain of nearly 9%.
Marketwatch.com commented that "while almost no one expects this to mark the start of an extended recovery amid a persistent global supply glut and worries over the Chinese economy, many are asking whether this is finally the end of an 18-month slide."
“For some of the analysts it had the hallmarks of a classic dead-cat bounce, a natural pause in the tailspin that had sucked prices below $30 a barrel for the first time since 2003 – with still lower lows lurking in the weeks ahead,” Marketwatch reported.
Others saw last week’s rebound as signs the wave of selling is slowing and a new base for prices being set.
Meanwhile Comex gold futures finished with a modest loss on Friday, but prices still rose over the week, with investors expecting no surprises from this week’s Federal Reserve’s upcoming monetary policy meeting.
February gold futures lost $US1.90, or 0.2%, to settle at $1,096.30 an ounce on Friday. That was a gain of 0.5% according to FactSet data.
Comex March silver futures ended 3.7 cents, or 0.3% lower, at $US14.057 an ounce, for a 1.2% weekly gain.
And Comex March high-grade copper rose by less than a cent on Friday to end at $US2.003 a pound and for a 3% gain for the week. That was the best week for copper since early October.
