Oil futures settled higher on Wednesday thanks to a relief rally based on news that wasn’t as bad as it could have been.
US stocks rose last week, but not quite as much as forecast, production eased a touch, and stocks of product held in the US eased.
Oil hardly reacted to the first estimate of US March quarter economic growth which showed a fall of 4.8%, the first contraction since 2014, and the largest since the GFC.
Nor was there any impact from the US Federal Reserve’s decision to leave its monetary policy unchanged.
Oil also got a boost on hopes for a rebound in demand as some countries look to ease pandemic-related shutdowns and amid apparent progress on a clinical trial for Gilead Sciences’ experimental coronavirus treatment. Investors ignored a separate published report that the drug doesn’t work.
West Texas Intermediate crude for June delivery rose $2.72, or 22%, to settle at $US15.06 a barrel on Nymex.
In Europe, June Brent crude, the global benchmark, added $US2.08, or 10.2%, to $US22.54 a barrel ahead of the contract’s expiration at Thursday’s settlement.
The US Energy Information Administration (EIA) reported Wednesday that US crude stocks rose 9 million barrels for the week ended April 24. That was the 14th consecutive weekly rise but was slightly lower than the average increase of 9.8 million barrels forecast by analysts. Two weeks ago stocks rose by a record 19 million barrels.
Crude stocks at storage hub Cushing, Oklahoma (the settlement point for the Nymex WTI contract) rose 3.7 million barrels to 63.4 million barrels, while daily domestic oil production edged down by 100,000 barrels to 12.1 million barrels, according to the EIA report.
Gold futures settled lower on Wednesday for the fourth straight session but bounced in after-hours trading in the wake of the Fed leaving policy unchanged and news of possible progress on an experimental treatment for COVID-19 the major influence.
Prices moved higher after the official settlement when the Federal Reserve pledged to help the economy fight the devastating impact of the coronavirus pandemic.
Gold had not really been moved by the GDP report in the morning showing the US economy fell at an annual rate of 4.8%.
Comex gold for June delivery rose to $US1,716.80 in trading Wednesday afternoon shortly after Fed issued its post-meeting statement saying its benchmark interest rate would remain in a range of 0 to 0.25% and that it would commit to using a full range of policy tools as long as the economy continues to face a public-health crisis.
Prices for June gold contract were up from the Comex settlement at $US1,713.40, which was down $US8.80, or 0.5%, from Tuesday. They rose further in after-hours trading to around $US1,729 an ounce near 6 am Sydney time on Thursday.
A report indicating that Gilead Sciences’ experimental treatment for the illness derived from the novel strain of coronavirus achieved some success in a government-run clinical trial evaluating remdesivir in certain COVID-19 patients.
But a separate report in The Lancet magazine said the drug didn’t help. Those were the official results from a Chinese study was emerged last week. Gilead has rejected those findings.
A separate study on the drug on patients with less severe forms of the virus will be released in May.
Among other Comex metals, July silver, which is now the most-active contract, lost 1.3 cents, or 0.08%, to settle Wednesday at $US15.315 an ounce, following a drop of less than 0.1% in the previous session.
July copper rose on 1% to $US2.3705 a pound.
Iron or prices edged up on Wednesday ahead of the May Day holiday in China on Friday.
The Metal Bulletin said the price of 62% Fe fines delivered to northern China ended at $US82.50 a tonne.
