Despite the weaker US dollar, oil futures ended Friday and last week sharply higher, boosted by hopes US production will continue to decline, and optimism about a positive outcome from next Sunday’s Opec production meeting.
The gains over the week were substantial – West Texas Intermediate crude futures jumped 8% in the US, while in Europe, Brent, the global benchmark, surged 8.5%.
Most of the gains came in a headlong surge upwards in crude prices on Friday.
In New York, West Texas Intermediate crude futures for May delivery jumped $US2.46, or 6.6%, to end at $US39.72 a barrel. In London, June Brent crude futures were up $US2.51, or 6.4%, to close at $US41.94 a barrel.
The rise in crude prices was helped in part by the weekly report on rig use from services company, Baker Hughes which showed the number of oil rigs fell for a third straight week.
The number of rigs dropped to 354 from 362 a week earlier, the lowest since late 2009. Compared with the same time last year, the number of rigs in use is down 406, against the most recent high of 1,609 less than two years ago as the shale oil boom was at its peak.
Oil prices are likely to remain volatile this week in the face of the weekly US production report on Wednesday, rig use report on Friday and then the Opec meeting next Sunday.
Comex gold futures meanwhile also finished higher Friday, capping the biggest weekly gain in three weeks. The surge in oil prices didn’t help, but the weakness in the US dollar did, as did worries about the global economy and rumours of a looming Japanese intervention to drive down the value of the yen.
That didn’t happen, but traders will be watching today for signs of Japanese selling of the yen. Traders are convinced it is just around the corner.
Comex June gold futures closed up $US6.30, or 0.5%, at $US1,243.80 an ounce on Friday for a weekly gain of about 1.7%. May silver rose 22.6 cents, or 1.5%, to $US15.384 an ounce, to be up around 2%.
In London, copper prices stabilised on Friday, helped by a lower dollar, but still had their biggest weekly loss since January. Three-month copper on the London Metal Exchange closed unchanged at $US4650 a tonne on Friday night, down 3.6% (most happened in Thursday’s 2.8% slide) over the week.That was the biggest weekly loss since the start of the year.
But in New York, Comex copper rose 1.5 cents, or 0.7% on Friday, to end at $US2.0870 a pound. But that was still a 3.5% loss for the week.
