Oil prices slipped nearly 1% to below $US77 a barrel on Friday in the US, but then regained some ground in late after hours trading to end the week at $US77.47.
Oil was hit by Friday’s rise in the US dollar (but not gold) and the weakness on global sharemarkets, especially among banks, as investors wondered if the recovery in the US was as strong as it has been made out to be.
In London Brent crude for January delivery slipped 44 cents to settle at $US77.20.
The greenback rose for a second straight session on Friday as investors cut exposure to risky assets and high-yield currencies ahead of the holiday-shortened week in the US.
But gold rose in spite of the greenback’s strength as investors used it as a ‘safe haven’.
Oil has traded mainly between $75 and $80 a barrel in recent weeks as mixed economic signals failed to give a clear outlook for crude.
Big US refiner, Valero Energy Corp, said on Friday that it will permanently shut its refinery in Delaware City, Delaware, because of weak economic conditions.
The move should have sent oil prices higher, but it is yet another sign of how the reality of the weak US economy and how the oil industry is struggling against weak demand for petrol, diesel and heating oil and falling margins.
The continuing lack of demand for oil products has led to rising stocks being stored at sea as well as on land.
Around 90 million barrels is now estimated to be held in floating storages around the world, that’s equal to a day’s consumption of oil around the world.
Gold climbed for a sixth straight day, despite the dollar strengthening late last week.
The greenback hit a 15-month low against a basket of major currencies at the start of the week, then edged higher as investors started worrying that the strength of the recovery wasn’t all that it was made out to be.
Gold reached a record $US1,153.40 an ounce on November 18 (last Wednesday) and has fallen once in 15 sessions this month.
The metal is up 30% this year and on its way to a ninth straight annual gain.
Comex December gold rose $US4.90, or 0.4% Friday to finish at $US1,146.80.
The rise reversed an early fall that saw the price lose 0.8% on the early strength in the dollar.
So far this month, the gold price has jumped by more than $US100.
Comex December silver was off 1.5 cents at $US18.44 an ounce in New York. January platinum for January fell $US2 to $US1,441.90 an ounce.
Wheat fell for a third straight day in Chicago as the impact of the world’s second largest harvest pressed down on demand for US gain.
Foreign purchases of US wheat are 29% down on a year ago, according to official export figures.
The stronger tone to the greenback late last week also had an impact.
March wheat fell 3.25 cents, or 0.6%, to $US5.8075 a bushel on the Chicago Board of Trade.
It fell 2.1% Thursday and Friday and stopped the recent rebound in wheat price.
Still prices for the front month rose 3.8% last week, instead of close to 6%.
Copper continues to defy the apparent reality of rising stocks and falling Chinese imports, plus the emerging doubts about the strength of the US economy.
This has been put down to financial investors (the same driving gold higher, but struggling in oil).
Comex March copper finished up 2.8c, or 0.9%, to $US3.134 a pound on Friday,
The metal was up 4.5% over the week.
Stocks overseen by the London Metal Exchange climbed for a 14th straight session, adding 0.3% to 421,875 tonnes.
That’s the highest level since April, and yet traders and investors are ignoring this message.
On the LME, three month copper rose $US50, or 0.7%, to $US6,845 a tonne ($US3.10 a pound).
LME tin, aluminum, lead and zinc prices rose; nickel fell.
