Brent oil futures ended just short of the key $US50 a barrel level and US West Texas Intermediate topped $US46 a barrel as the great late 2020 energy rebound continued on Friday.
Expectations of a US economic stimulus package and the possibility of a vaccine for the coronavirus again overrode rising supply and increased COVID-19 deaths.
A bipartisan $US908 billion coronavirus aid plan gained momentum in the US Congress but that’s far less what was talked about two months ago before the November 3 poll.
The driver for the continuing run-up in oil prices has been the deal to slowly cut the OPEC production cap in the first quarter instead of a hard 2 million barrels a day chop.
OPEC and its allies including Russia, Kazakhstan, Oman, and others, agreed to raise oil supply by 500,000 barrels a day in the next month. That is well below the 2 million barrels per day initially agreed upon.
Future output levels will be discussed at forthcoming monthly meetings, a recipe for the emergence of more price volatility.
The current deal to reduce output by 7.7 million barrels a day expires at the end of December.
Meanwhile, Baker Hughes reported on Friday that the number of active oil rigs in the United States rose by 5 to 246—the highest number of rigs since mid-May.
That saw the total number of active oil and gas rigs increase for the week by 3, with oil rigs up by 5 and gas rigs falling by 2.
Total oil and gas rigs in the United States are now down by 476 compared to this time last year.
Gold prices meanwhile settled higher on Friday at $US1,841.10 an ounce, up $US10.90 an ounce or 0.6%.
A weaker US dollar helped push prices up in the afternoon session after it was weak earlier in the day.
In fact, the weaker greenback has been one of the main drivers for the past week or so.
Inflation fears among some investors are just silly given the excess capacity in many economies and the surge in COVID-19 infections and deaths in the US which will put more downward pressure on prices in the new year.
Inflationistas have been worried about currency debasement now since the GFC and nothing of the sort has happened. In fact, inflation has not topped the Fed’s 2% target (on the preferred core basis) now for the past five years.
That saw gold futures rise $US50 an ounce over the week and around 2.8% by the close on Friday when the after-hours price ended at $US1,842.
Copper prices on Comex finished the session a touch under $US3.50 a pound, or around 1%.
LME three-month copper ended lower at $US7,748 a tonne, up 3.8% for the week though.
