Commodity Prices: Oil Declines as Buying Fades
COMMODITY PRICES – Overnight, the oil prices recovered higher amid the statement of OPEC that it would make deeper-than-expected about the quotas of its output. However, the OPEC cuts weakened the optimism on Friday’s early morning trade. This was amid the concerns about a slowdown in economic growth and escalating US shale production. Moreover, these emerging concerns outweighed hopes about the possibility of the cartel to maintain the global supply glut in check.
There was a decline of 18 cents, or 0.39%, at $45.70 a barrel in the West Texas Intermediate crude futures. Further, this was on track for a 10% weekly decline.
Meanwhile, there was a decline of 44 cents, or 0.81%, to $53.91 in the Brent crude futures. Moreover, it declined 20% on the week.
For the past 24 hours, prices made a minimal move higher amid the statement of OPEC Secretary General Mohammad Barkindo. As per Barkindo, member states should trim their output to 3.02%. This percentage cut is higher in comparison with the initially agreed figure of 2.5%.
Moreover, Barkindo stated that there’s a possibility that the quotas of the member countries would appear in public. He also commended the pledge of Saudi Arabia to curb output in 0.2 million barrels per day.
Expectations surfaced about the cartel publishing its complete list of supply cuts next week.
“The current oil prices will force OPEC to increase compliance with the production cut deals, supporting Brent prices. The temporary recovery in prices has been driven by short-sellers buying back,” said Guotai Junan Futures Crude Research Head Wang Xiao.
Commodity Prices: Gold closes higher as dollar tumbles in post-Fed
Investors shifted to gold as both stocks and dollar declined in the aftermath of the decision of the US Federal Reserve.
On Thursday, Gold’s futures surged to highs for six months. Further, it closed their gap with the $1,300 level target of the gold bugs achieved back in June.
The February delivery of the Benchmark COMEX gold futures traded higher $11.50 at $1,267.90 per troy ounce. This followed after it hit a six-month high of $1,270.20. The contract added 1%, the contract’s largest daily advance since November 1.
“It’s a rare combination, equities and the dollar taking it on the chin at the same time, leaving investors with little choice but the relative safety of gold. Right now, the next resistance is $1,280 but we’re definitely on track to $1,300 if we get past that,” said Tom Beller, a markets strategist for precious metals of Chicago-based RJO Futures.