Arab Today, arab today oil price soars in mixed week for commodities
Last Updated : GMT 16:55:59
Arab Today, arab today
Arab Today, arab today

Oil price soars in mixed week for commodities

Arab Today, arab today

Arab Today, arab today Oil price soars in mixed week for commodities

An oil pump-jack in the oil town of Gonzales
London - AFP

Star commodity performer oil surged in value this week on hopes that easing US shale output could help curb the stubborn global supply glut, analysts said.

"Oil prices rose sharply in the past week, supported by further evidence that US production and crude stocks are close to peaking -- if they have not done so already," said Julian Jessop, head of commodities research at consultancy Capital Economics.

"The recent stability of the US dollar has also helped sentiment towards commodities more generally."

Oil prices have fallen as much as 50 percent since mid-2014 on the back of copious global supplies and weak demand.

OIL: Crude futures rallied on signs that US shale oil production -- a key driver of the stubborn supply glut that sparked collapsing prices -- may be on the cusp of easing.

The Organization of the Petroleum Exporting Countries (OPEC) predicted that US crude production would fall in the final half of the year, reducing the global oversupply.

"Higher global refinery runs, driven by increased seasonal demand, along with the improvement in refinery margins, are likely to increase demand for crude oil over the coming months," OPEC said in its monthly oil market report.

"Given expectations for lower US crude oil production in the second half of the year, these higher refinery needs will be partially met by crude oil stocks, reducing the current overhang in inventories."

Carl Larry, an analyst at Frost & Sullivan, said that the market appeared to be trending higher, which could bring prices back up to the $65-70 range, thanks to a rebalancing of supply and demand.
"We're starting to see refineries run higher," Larry said. "We have a lot of refining season to go -- we just got started -- we are going to start seeing more drawdown in crude, we are going to start seeing production start to tip off."

Prices diverged on Friday as traders locked in profits following a six-day rally.

"After a sustained increase in both the WTI and Brent over the past week, traders are selling... and this has led to the downward pressure in prices we see today," said analyst Daniel Ang at Phillip Futures in Singapore.

But Ang said the oversupply was unlikely to end soon due to strong OPEC production levels.

The 12-member OPEC, which pumps around a third of the world's oil, saw its production in March rise by 810,000 barrels per day to average 30.79 mbpd, Ang said.

By Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in June rallied to $64.00 a barrel from $56.84 for the May contract the previous week.

On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for May leapt to $56.12 compared with $50.80.

- Gold investors track Greece -

PRECIOUS METALS: Gold climbed as uncertainty over Greece's potential eurozone exit sent investors into the safe-haven commodity.

"Escalating worries that Greece will default on its debt and the ultimate decision surrounding its inclusion in the eurozone has helped squeeze gold higher as the precious metal once again breaks above the $1,200 level," said IG analyst Alistair McCaig.
Negotiations between Greece and international creditors will resume Saturday in Brussels on reform requirements Athens needs to meet to receive its last payment of its bailout funds, the European Union said.

In Washington, top European officials were on Thursday forced to play down fears that the country was poised to exit the eurozone, after the IMF rejected suggestions that Athens could postpone its IMF loan repayment.

By Friday on the London Bullion Market, the price of gold climbed to $1,203.35 an ounce from $1,182.75 the previous week.

Silver firmed to $16.36 an ounce from $16.30.

On the London Platinum and Palladium Market, platinum dipped to $1,161 an ounce from $1,205.

Palladium was unchanged at $777 an ounce.

BASE METALS: Base or industrial metals diverged, but tin slumped on oversupply fears.

"The tin price has fallen (to) its lowest level since September 2009," said Commerzbank analysts.

The sharp drop was "due to fears of an oversupplied market after China scaled up its production in the first quarter and because significantly more tin is reaching the market.

"The downward movement is likely to have been exacerbated by sell orders from speculative financial investors."

By Friday on the London Metal Exchange, copper for delivery in three months rose to $6,079 a tonne from $6,025.50 the previous week.

Three-month aluminium advanced to $1,837 a tonne from $1,766.50.

Three-month lead increased to $2,043.50 a tonne from $1,998.50.

Three-month tin tumbled to $15,100 a tonne from $16,570.

Three-month nickel increased to $12,745 a tonne from $12,680.

Three-month zinc edged higher to $2,223 a tonne from $2,203.50.

- Sugar extends recovery -

SUGAR: Prices recovered further from the commodity's recent slide close to six-year lows.

By Friday on LIFFE, London's futures exchange, a tonne of white sugar for delivery in August gained to $375.10 from $366.10 a week earlier.

On ICE Futures US, unrefined sugar for July increased to 13.22 US cents a pound from 12.45 US cents.

COCOA: Futures rebounded despite ongoing concerns for world demand.

By Friday on LIFFE, cocoa for delivery in July climbed to £1,979 a tonne from £1,974 the previous week.

On the ICE Futures US exchange, cocoa for July rose to $2,875 a tonne from $2,804.

COFFEE: Prices posted modest gains.

By Friday on ICE Futures, Arabica for delivery in July rose to 142.55 US cents a pound from 136.70 cents the previous week.

On LIFFE, Robusta for July gained to $1,832 a tonne from $1,799.

RUBBER: Prices rose on keen demand.

By Friday, the Malaysian Rubber Board's benchmark SMR20 rose to 139.85 US cents a kilo from 136.90 US cents a week earlier.

 

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