Oil prices fell on Friday, as traders focused on demand worries due to new coronavirus-related restrictions on business in New York and the continuing escalation in infection numbers and deaths.
Governor Andrew Cuomo ordered New York City restaurants to suspend indoor dining effective tonight, our time, thanks to a rise on COVID-19 infections in the city.
That’s despite evidence that dining and other gatherings outside the home are not as important a source of infections as events in houses and apartments, such as visits, meals and festivals.
But the state can’t control them in New York or the US (unlike Australia and especially Victoria where people mostly complied).
The edict underlines just how desperate governments at all levels in the US – except the Federal government under Donald Trump – are to control and cut the latest wave of infections and deaths.
The edict also reminded traders that demand for oil remains weak, as the big jump in US crude stockpiles last week showed.
But until Friday that message was all but ignored as bulls ran through the market this week.
In Europe Brent futures settled down 28 cents, or 0.6% at $US49.97 a barrel. That was after prices rose above $US51 a barrel on Thursday to an early-March high.
In New York, US West Texas Intermediate (WTI) crude fell 21 cents, or 0.5%, to $46.57, having risen 2.95% on Thursday.
For the week, Brent was up 1.5% and WTI was up less than 1%. That was the sixth consecutive week of gains for the first time since June.
A stronger US dollar on Friday also helped push oil lower.
A surge in active oil rig numbers in the US added to the rediscovery of demand weakness and oversupply.
US energy firms last week added the most oil and natural gas rigs in a week since January as producers keep returning production efforts.
The US drilling rig count rose by 15 units to reach 338 rigs working, according to the weekly report from Baker Hughes.
That was down 461 units from the 799 rigs working a year ago. The number of rigs drilling on land was up 15 units week-over-week with a total of 323 units.
Gas rigs edged up by 4 units to reach 79, 50 fewer than were drilling for gas at this time a year ago.
US inventories rose by 15.2 million barrels from the previous week. At 503.2 million barrels, US crude stocks are about 11% above the five year average for this time of year.
Petrol supplied in the last four months across the US is down 12% and jet fuel supplied is down 34.9% from this time last year.
Meanwhile, gold prices rose Friday to end higher for the week as a firmer US dollar had little impact.
Comex February gold ended up 0.3% or $US6.20 an ounce at $US1,843.60 in New York on Friday.
For the week it was up 0.2%.
Comex silver eased to just over $US24 an ounce to be down 1% for the week. Comex copper fell 1.1% on Friday to just over $US3.53 an ounce. For the week the metal was up 0.15%.
The US dollar ended up around 0.2% as more and more traders focused on sterling and the euro as the deadline for a trade between the US and EU approached.
Inflation remains weak in the US. Earlier in the week consumer prices edged up 1.2% in the year to November, unchanged from October. Inflation rose 0.2% from October while core inflation was up 1.6% in the year to November.
The US Producer Price Index (PPI) rose 0.1% in November, following October’s increase of 0.3%; the data was in line with economists’ forecasts.
Core PPI, which strips out volatile food and energy costs, rose 0.1% last month, following October’s increase of 0.1%.
In London, LME copper slipped on Friday after touching another multi-year peak, hit by profit-taking amid worries about no stimulus deal and the looming collapse in Brexit trade deal talks.
Three month copper on the London Metal Exchange lost around 1.5% to $US7,760 a tonne after hitting $US7,973.50 in trading, the highest since February 2013.
At Friday’s peak, copper had soared 82% since touching 45-month lows in March during the initial stages of the COVID-19 pandemic.
LME nickel, jumped to a 14-month high of $US17,660 before easing 0.4% to $US17,360.
