Oil prices hit new multi-year highs on Friday, ending higher on the day and the week (again), thanks to growing concerns over the economic collapse of Venezuela and its oil industry, plus possible new sanctions against Iran from the Trump administration from May 12 onwards.
Venezuela and Iran are both members of the Organisation of the Petroleum Exporting Countries and both have emerged as hot spots so far as oil prices are concerned.
An OPEC survey conducted by S&P Global Platts showed on Friday that the group’s crude production in April fell for a third straight month to a one-year low.
It produced 32 million barrels a day last month, down 140,000 barrels a day from March, with the survey attributing the drop to falling output from Venezuela.
“Venezuela’s woes have been well documented as its barrel count has fallen in every month save three since February 2016,” according to S&P Global Platts.
It produced 1.4 million barrels a day in April, down 80,000 barrels a day from a month earlier and down 540,000 barrels a day in the past year.
That helped send June West Texas Intermediate crude oil up nearly 2%, or $US1.29, to settle at $US69.72 a barrel in New York. That was the highest finish since November 26, 2014, according to US financial data group FactSet.
Friday’s big gain provided most of the week’s 2.4% rise in price.
In Europe, Brent crude, the global benchmark added $1.25, or 1.7%, to $74.87 a barrel. The contract, which became the front month at Monday’s settlement, ended up 1.5% over the week.
Baker Hughes weekly US rig count showed another rose in oil rig numbers and total numbers.
It was 5th straight rise in oil rigs in use – up 9 to 834, The total active US rig count, which includes oil and natural-gas rigs, climbed by 11 to 1,032.
A year ago the oil-rig count rose by nine to 697, up more than 19%. Gas rigs increased by four to 171, the total rig count rose by 13 to 870, up 19%.
Meanwhile, Comex gold futures settled with a small gain on Friday, but recorded a loss for a third week in a row as investors showed a lukewarm reaction to the monthly US jobs report.
The data came was softer than expected, especially wage growth and there was nothing in the report that would force the Federal Reserve to become more aggressive with interest-rate hikes.
The report assured markets that rates will rise for a second time this year at the June meeting of the Fed’s Open Markets Committee.
164,000 jobs were created in April with the jobless rate below 4% for the first time since 2000 at 3.9%. Inflation data within the report was also weaker than expected as wages grew by an unchanged 2.6% (annual) for the third month in a row.
June gold rose $US2, or 0.2%, to settle at $US1,314.70 an ounce. Prices fell around 0.7% lower for the week.
The US Dollar Index which measures the buck against a basket of six currencies, was up 0.2% at 92.58, its highest level since late December. The 10-year Treasury note yield edged up to 2.952.
In other metals trading, Comex July silver added 0.4% to $US16.519 an ounce. It was up around 0.1%..
July copper settled at $US3.086 a pound, up nearly 0.2% for the session, 0.5% higher for the week.
And global iron ore prices eased in line with futures trading on Friday, the first day China’s Dalian Commodity Exchange opened up its futures market to overseas investors.
The Metal Bulletin’s 62% Fe Iron Ore Index: fell 59 cents to AUS66.28 tonne cfr Qingdao. That was 60 cents above the April and last week close of $US65.68 a tonne.
