Oil was once more the focus of commodity markets last week and will be again this week but attention will also focus on its role in what will be another big rise in US inflation when the March monthly Consumer Price Index is released.
Oil futures prices rose Friday despite another sharp rise in the number of oil rigs operating in the US.
Oil prices recouped the bulk of their losses by Friday, reflecting fears that the brutal Russian invasion of Ukraine will drag on, further unsettling global energy markets.
US West Texas Intermediate crude oil futures closed at $US98.26 a barrel in New York, up 2.3% on the day. It fell to $US97.90 in after-hours trading.
But the settlement was around 20% below the peak in early March in the immediate wake of the invasion in late February.
Brent, the global marker, settled at $US102.78 and eased a touch after hours to $US102.70. That was a loss of of more than 2% for the week.
That saw oil prices lose ground with the price of oil down 1% this week, as the International Energy Agency said Western nations scheduled the release of tens of millions of barrels from their strategic reserves.
The price of natural gas rose almost 10% last week to close at $US6.28 a million British thermal units, close to 14-year highs, amid anticipation of increased demand for US liquefied natural gas in Europe as Germany and other nations pledge to seek alternatives to Russia gas.
US oil production rose for the second week in the past four, hitting an average 11.8 million barrels a day, the highest daily rate for more than five months.
The number of oil rigs operating in the US rose by 13 last week, according to data compiled by energy-services firm Baker Hughes.
The count rose to 546 to Friday, Baker Hughes said, 62% more than 337 oil rigs in operation a year ago.
Oil and gas rigs in the US rose to 689. A year ago, there were 432 rigs operating.
Gas rigs rose three at 141, and miscellaneous rigs remained at two.
In the same period of 2021, there were 93 gas rigs and two miscellaneous rigs in operation.
Brent prices are up 62% on a year ago and WTI is up 65% – mostly due to the surge since January. Prices are down around 10% in the past month.
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Gold investors will also be paying close attention to Tuesday’s inflation numbers.
Analysts are looking for prices pressures to reach new four-decade highs of well above 8% last month which gold bugs reckon will help.
Market consensus calls expect to see the annual inflation rate at 8.4% — the new four-decade high.
“The March consumer price inflation release … is expected to jump again due to the surge in gasoline prices. The national average was $US3.50/gallon in February versus $US4.19/gallon in March. Food prices have been rising sharply too while supply chain strains, rising commodity prices, and higher labor cost inputs in an environment where companies have decent pricing power mean broad-based contributions,” said ING chief international economist James Knightley in a note on Friday.
High inflation data will keep pressure on the Fed to hike by 0.50% in May.
June Comex gold futures settled at $US1,945.60, up more than 1% on the week. Gold rose further in late trading ending the week at just over $US1,950 an ounce.
Comex silver edged up 0.7% to $US24.82 an ounce and copper prices jumped 0.7% to $US4.72 a pound.
That is still close to the all-time highs a year ago and before the jump past $US5 a pound in early March.
