Gold futures dipped, copper fell and oil futures dipped – despite Friday’s rise off the back of the bad fires in Canada.
Iron on ore prices fell, copper was steady and Chinese investors appear to be getting cold feet as regulators and markets tried to cool their madcap speculation.
Oil futures rose Friday thanks to the fires in Alberta, Canada’s main oil producing province and an attack on an offshore oil facility in southern Nigeria boosted hopes of supply cuts.
Over the weekend, BP declared force majeure on some of its Canadian production because of the impact of the fires.
And the weak US jobs report, normally a negative, had little impact because of the fires in Canada.
In New York, West Texas Intermediate futures rose 34 cents, or 0.8%, to close at $US44.66 a barrel early Saturday, our time, while in London, Brent crude the global oil benchmark, added 36 cents, or 0.8%, to settle at $US45.37.
Brent ended the week 4.2% lower, while WTI finished the week 2.7% lower (the Canadian fires are closer to the US and the tar sands of Alberta supply direct into America’s oil supply system).
A report on rig counts from Baker Hughes Inc was again a small positive for higher prices. It showed that the number of active US rigs drilling for crude fell for a seventh straight week, down by 4 to 328 by Friday. The total US rig count fell by 5 to 415 rigs.
Meanwhile Comex gold futures finished sharply higher Friday after the weak jobs report saw investors change their bets on the timing of the next US rate rise to much later this year instead of June.
June gold rose $US21.70, or 1.7%, to end at $US1,294 an ounce. That left gold with a modest weekly gain of 0.3%.
Comex July silver futures rose rising 20 cents, or 1.2%, to settle at $US17.527 ounce. But silver lost 1.6% last week.
And Comex copper for July delivery ended unchanged at $2.1540 a pound on Friday but more than 4% lower over the week.
But keep a close eye on China’s futures markets – not only after the latest trade data released yesterday.
China’s rebar (or steel reinforcing steel bar) futures fell 9.5% last week, helping lead iron ore futures and physical prices lower as some of the speculative tensions drained out of the markets.
Iron ore prices fell to just above $US58 a tonne – down 12% in the week.
The Financial Times said the fall in rebar futures “was the biggest loss since the contract started seven years ago following measures by the country’s futures exchanges to curb speculative trading."
China’s three largest futures exchanges have raised transaction fees and margin requirements and reduced night trading hours in the last three weeks to try and cool hot futures markets for all sorts of commodities – not just iron ore or rebar. It has involved eggs, cotton, grains, aluminium and nickel. But copper and gold haven’t been as heavily sought as they were one to two years ago by speculators.
