Oil and gold futures settled lower on Friday, as the US dollar rose on the back of the rise in bond yields.
In fact oil futures gave back much of Thursday’s rally in the wake of the surprise drop in US crude inventories the week before caused by the impact of a late season Hurricane.
But oil prices still racked up a weekly gain as some traders held on to hope that major producers will agree later this month to curb output.
October West Texas Intermediate crude futures fell $US1.74, or 3.7%, to settle at $US45.88 a barrel in New York early Saturday morning, our time.
That left futures prices up around 3.2% over the week, but that is likely to disappear as prices readjust to the new concerns about a rise in US interest rates.
In London, the Brent crude November futures contract lost $US1.98, or 4%, to $US48.01 a barrel.
But despite Friday’s fall Brent gained 2.5% for the week.
Friday’s slide in bond prices and surge in yields in Europe and the US boosted the value of the greenback,undermining Thursday’s confidence from 14.5 million barrel loss in US crude stocks for the week before.
That was the biggest fall in stocks since 1999 and followed the suspension of crude and gas production across much of the southern US coast and offshore as a huge Hurricane passed the region.
With around 22% of US oil capacity shut for the storm, US production and stocks fell, but that will be reversed in coming weeks, especially with Baker Hughes reporting a rise of 7in the number of oil drilling rigs in service last week – to 414.
That’s a rise of 98 from the lows of late May and early June and the number of rigs has risen in 10 of the past 11 weeks.
Meanwhile, the Organization of the Petroleum Exporting Countries and Russia are maintaining production-freeze talk ahead of a meeting on the subject in Algeria on the sidelines of the International Energy Forum that’s held on September 26-28.
But the importance of that talk faded on Friday so far as oil market traders are concerned. They now say any agreement will be like previous attempts – fleeting and impossible to make hold. Meanwhile Comex gold futures saw a third-straight decline on Friday, but managed a small weekly rise in the wake of the rise in bond yields.
Comex December gold fell $US7.10, or 0.5%, to settle at $US1,334.50 an ounce. But gold futures still saw a 0.6% weekly rise, according to FactSet data.
Other metals finished broadly lower for the session. December silver shed 31 cents, or 1.6%, to $1US9.368 an ounce—ending flat for the week.
And Comex December copper eased less than a cent, or 0.4%, to $US2.093 a pound, ending up around 0.7% for the week to Friday.
