Oil prices fell last week despite a small gain on Friday off the back of the better than expected April jobs data and a dip in the value of the US dollar.
Friday’s small rise took futures prices back above the one-month low they had hit on Thursday, but that wasn’t enough to reverse what ended up as the second successive weekly decline.
The expiration of US waivers on Iran oil sanctions for 8 major buyers of Iranian crude on Thursday and persistent political turmoil in Venezuela, have up to know supported rising prices.
But a sharp rise in US stocks last week and another weekly rise in US output sent prices sharply lower by Thursday and the uncertainty continued to dominate activity on Friday.
Traders are now starting to focus on whether Saudi Arabia will decide to help make up for any oil lost from the market from the US move on Iranian waivers to the 8 buyers (including China, India, Japan and South Korea), or move to extend a production-cap deal with major producers – including Russia that’s due to expire at the end of June.
Donald Trump wants the Saudis and OPEC to boost production, but despite claims that they have agreed, OPEC and the Saudis have said nothing concrete, leaving the US President swinging in the air on the prospect of a further rise in prices in the next three to six months.
US West Texas Intermediate crude for June delivery rose 13 cents, 0.2%, to settle at $US61.94 a barrel. That saw a weekly loss of about 2.2%. It had ended Thursday at $US61.81 in New York, the lowest since April 1.
In Europe, the global benchmark July Brent crude rose by 0.1%, to $US70.85 a barrel. It dropped below $US70 on Thursday but finished at $US70.75, the lowest in three weeks. Brent futures dipped by around 1.1% for the week.
Baker Hughes meanwhile, reported Friday that the number of active rigs drilling for oil rose in the US by 2 to 807 this week, which was nothing after the 20 rig slide the week before. The total active domestic US rig count, which includes natural-gas rigs, fell by 1 to 990.
According to the US Energy Information Administration, US crude stocks last week rose to their highest since September 2017, jumping by 9.9 million barrels to 470.6 barrels, as production rose to around a record high of 12.3 million barrels a day (bpd).
Meanwhile, Comex gold futures rose on Friday, recouping some of Thursday’s sharp losses that sent prices to their lowest level of the year.
But gold still had a loss for the week of 0.6%—the fifth in six weeks.
Comex gold for June delivery added $US9.30, or 0.7%, to settle at $US1,281.30 an ounce, according to the FactSet financial data group.
Friday’s news of 260,000 new jobs in April, no change in wages at an annual 3.2% and a 49 year low for unemployment of 3.6% had little impact except to send the US dollar down a touch as silly investors changed their panic on suggestions US interest rates might rise (That was their takeaway from the Fed meeting this week and the media conference by chair Jay Powell).
July silver also rose – up 36.1 cents, or 2.5%, to $US14.978 an ounce, but down 0.7% on the week.
In other metals trade, July platinum rose 2.4% to $US874.80 an ounce, but lost 3.2% for the week, while June palladium was up 1.1%, to $US1,358 an ounce, but off about 6.2% for the week.
July copper rose 1.4% on Friday to $US2.819 a pound, but still ended the week down 2.4% as global metal prices fell with lead, zinc, and aluminum all touching year or two-year lows on the London metal Exchange during the week.
LME three month copper fell as well. The weaker dollar on Friday helped it end Friday up 1.1%, but down 2.5% over the week.
That was its biggest weekly loss since early November.
Three month LME aluminium fell 1.1% on Friday to $US1,795.50 a tonne, zinc rose 1.5% to $US2,772 after falling to a seven-week low in the Thursday session, lead rose 1.3% to $US1,900, tin gained 0.3% to $US19,325 while nickel was up 1.2% at $US12,190 a tonne.
