Another solid week for most commodities – although oil was boosted late in the week by Hurricane Harvey’s swoop on Texas. But gold, copper, iron ore, zinc, nickel and aluminium all completed a solid five days of action.
The Metal Bulletin spot iron ore price nudged $US80 a tonne earlier in the week but couldn’t sustain the move and fell back, but then bounced a little to end Friday at $US78.38 a tonne for the 62% ore delivered to northern China.
That was up 1.5% or $US1.22 a tonne from the Thursday close and up slightly from the previous week’s close of $US77.94 a tonne.
Because of the way iron ore pricing is based (via various indexes set on the middle month of each quarter), contract prices for the December quarter will be a bit stronger than expected.
Analysts point to falling stocks of iron ore at Chinese mills and ports in the past couple of weeks as helping demand, along with looming capacity cuts.
……
In the US October West Texas Intermediate crude oil futures added 44 cents, or 0.9%, to finish at $US47.87 a barrel ahead of the arrival of Hurricane Harvey which hits the Texas coast on Saturday, Sydney time.
The market will trade uncertainly until the state of the oil infrastructure in the Houston area, and in the Gulf is known. That could take a day or so. The storm came ashore in Texas as a giant Cat 4 hurricane and the strongest storm to hit the US in 10 years.
US crude futures fell 1.6% for the week, Brent crude in London lost 0.6% despite a 37 cent rise on Friday to $US52.41 a barrel. Baker Hughes on Friday reported that the number of active US il rigs fell for the second week in a row last week (the first time there has been a fall in successive weeks this year).
The number dropped 4 to 759 rigs. The total active US rig count, which includes oil and natural-gas rigs, fell by 6 to 940.
Some rigs in the Eagle Ford shale area of southern Texas shut down on Thursday and Friday because of the looming Hurricane Harvey.
BHP was one producer identified as having closed its rigs in the area. As the storm passes, that could see rigs resume working this week, boosting the results of this week’s survey from Baker Hughes.
……………….
Meanwhile Comex gold prices settled Friday at their highest level since early June on Friday night, as the US dollar dropped to a three week low.
The moves for gold and the currency came on the heels of a speech by US Federal Reserve Chairwoman Janet Yellen that didn’t offer clues on the central bank’s monetary policy investors hoped for.
In a much-anticipated speech at the Kansas City Federal Reserve Bank’s conference in Jackson Hole, Wyoming, Yellen stayed clear of interest rates and instead defended increased financial regulation in the wake of the GFC a decade ago.
Comex gold for December delivery rose $US5.90, or 0.5%, to settle at $1,297.90 an ounce after reaching highs above $US1,300 overnight (for the second week in a row).
Gold settled Friday at the highest level for a most-active contract since June 5, according to figures from US data group FactSet. The contract finished the week up 0.5% and at the highest level since November 2014.
In other metals trading, Comex copper futures for September ended little changed at $US3.034 a pound, to post a gain of 3.2% over the week.
In London three-month copper on the London Metal Exchange was up 0.5% at $US6,66 a tonne, after rising as far as $US6,747, the highest since November 2014.
LME aluminium – up 25% since January – was flat at $US2,105.
And on Comex, September silver futures rose 8.6 cents, or 0.5%, to $US17.049 an ounce, for a weekly rise of 0.3%.
