Commodities
Gold notches weekly gain after continuous hold to $1,900
© Reuters.
Investing.com — The first weekly retreat in two months threw another lifeline at gold on Friday, helping secure the yellow metal’s hold on $1,900 territory and score a modest weekly gain of its own.
Gold’s most-active futures contract on New York’s Comex, , settled at $1946.20 ounce, up $13.30, or 0.7%, on the day. For the week, the benchmark gold futures contract rose $3.50, or 0.2%.
The , which traded as high as $1,930.90 an ounce at one point Monday, hovered at $1,924.22 by 13:55 ET (17:55 GMT). That left spot gold, which is determined by real-time trades in physical bullion, up 0.4% on the week.
Spot gold’s ability to hold on to $1,900 support came under the spotlight this week after the headline reading for the U.S. surged beyond expectations for a second month in a row, boosting concerns about inflation and the potential for the Federal Reserve to get aggressive with interest rates again.
Global markets are adjusting to a new outlook for rate hikes after the European Central Bank on Thursday raised rates to a record high of 4% even as it signaled that hike to be its last.
Markets closely watching Fed verdict on inflation
The Fed’s policy-makers aren’t expected to raise rates when they meet on Sept. 20, not after 11 hikes that added 5.25 percentage points to a base rate of just 0.25% in February 2022.
But what Chairman Jerome Powell says at his news conference on Wednesday will be closely watched for clues on Fed think for the rest of the year, especially with two more policy meetings on the schedule for November and December.
Still, with a Fed hike seemingly out of the way for now, dollar investors sat on the sidelines while others took profit on the greenback’s rally of the past eight weeks, sending gold up instead as a hedge.
Mixed outlook for rates send mixed signals around the world
“Gold prices are surging as risk aversion percolates,” said Ed Moya, analyst at online trading platform OANDA.
“A lot of pessimism is growing across Europe and that is triggering some safe-haven flows towards gold. The key for gold is for global to retreat and that won’t happen until we get beyond next week’s central bank-a-palooza that might show the end of tightening is mostly here for the advanced world.”
U.S. consumer prices rose a second month in a row in August, reaching a year-on-year growth of 3.7% from 3.2% in July, due to high pump prices of gasoline which accounted for more than half of the increase — a phenomenon that could put renewed pressure on inflation fighters at the Fed.
The central bank’s desired inflation remains at a max 2% per year and it has vowed to get there with more rate hikes if necessary.
(Ambar Warrick contributed to this item)
By Scott DiSavino
(Reuters) – U.S. energy firms this week cut the number of oil and rigs operating for a third week in a row to the lowest since December 2021, energy services firm Baker Hughes (NASDAQ:) said in its closely followed report on Friday.
The oil and gas rig count, an early indicator of future output, fell by four to 576 in the week to Jan. 24.
Baker Hughes said this week’s decline puts the total rig count down 45, or 7% below this time last year.
Baker Hughes said oil rigs fell by six to 472 this week, their lowest since December 2021, while gas rigs rose by one to 99.
In the Permian Basin in West Texas and eastern New Mexico, the nation’s biggest oil-producing shale basin, the rig count fell by six in the week to 298, the lowest since February 2022.
That six-rig decline in the Permian was the biggest weekly drop since August 2023.
The oil and gas rig count declined by about 5% in 2024 and 20% in 2023 as lower U.S. oil and gas prices over the past couple of years prompted energy firms to focus more on paying down debt and boosting shareholder returns rather than raising output.
Even though analysts forecast U.S. spot crude prices could decline for a third year in a row in 2025, the U.S. Energy Information Administration (EIA) projected crude output would rise from a record 13.2 million barrels per day (bpd) in 2024 to around 13.6 million bpd in 2025.
On the gas side, the EIA projected a 43% increase in spot gas prices in 2025 would prompt producers to boost drilling activity this year after a 14% price drop in 2024 caused several energy firms to cut output for the first time since the COVID-19 pandemic reduced demand for the fuel in 2020. [NGAS/POLL]
The EIA projected gas output would rise to 104.5 billion cubic feet per day (bcfd) in 2025, up from 103.1 bcfd in 2024 and a record 103.6 bcfd in 2023.
By Georgina McCartney
HOUSTON (Reuters) -Oil prices settled slightly higher on Friday but posted a weekly decline, ending four straight weeks of gains, after U.S. President Donald Trump announced sweeping plans to boost domestic production while demanding that OPEC move to lower crude prices.
futures settled up 21 cents, or 0.27%, to $78.50 a barrel. U.S. West Texas Intermediate crude (WTI) settled up 4 cents, or 0.05%, to $74.66.
Brent has lost 2.8% this week while WTI was down 4.1%.
Trump on Friday reiterated his call for the Organization of the Petroleum Exporting Countries to cut oil prices to hurt oil-rich Russia’s finances and help bring an end to the war in Ukraine.
“One way to stop it quickly is for OPEC to stop making so much money and drop the price of oil … that war will stop right away,” Trump said as he landed in North Carolina to view storm damage.
The threat of harsh U.S. sanctions on Russia and Iran, which are key oil producers, could undermine Trump’s goal of lowering energy costs, StoneX analyst Alex Hodes said in a note on Friday.
“Trump knows this and has leaned on OPEC to cover the void that these will create,” Hodes said.
On Thursday, Trump told the World Economic Forum he would demand that OPEC and its de facto leader, Saudi Arabia, bring down crude prices.
OPEC+, which includes Russia, has yet to react, with delegates from the group pointing to a plan already in place to start raising oil output from April.
“I don’t really expect OPEC will change policy unless there is a change in fundamentals,” UBS commodities analyst Giovanni Staunovo said. “Markets will be relatively muted until we get more clarity on sanctions policy and tariffs.”
TARIFFS
Chevron (NYSE:) said on Friday it had started production at a $48 billion expansion of the giant Tengiz oilfield, which will bring its output to around 1% of global crude supply, and could further pressure OPEC’s efforts in the last few years to limit production.
Trump declared a national energy emergency on Monday, rolling back environmental restrictions on energy infrastructure as part of his plans to maximize domestic oil and gas production.
These rollbacks could support oil demand but have the potential to exacerbate oversupply, said Nikos Tzabouras, senior market specialist at trading platform Tradu.
Trump’s policies so far have largely followed predictions on the supply side, including cutting red tape to promote domestic supply growth, according to StoneX’s Hodes. However “the lower hanging fruit for growth has already been picked.”
The U.S. president vowed on Wednesday to hit the European Union with tariffs and impose 25% tariffs on Canada and Mexico. He also said his administration was considering a 10% punitive duty on China.
As attention shifts to a possible February timeline for new tariffs, caution is likely to persist in the market, given potential negative implications for global growth and oil demand prospects, said Yeap Jun Rong, a market strategist at IG. Traders expect oil prices to range between $76.50 and $78 a barrel, he added.
While bullish catalysts such as a significant drawdown in stocks are providing temporary positive swings, an over-supplied global market and projections of ailing Chinese demand continue to weigh on crude futures, said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova.
U.S. crude inventories last week hit their lowest level since March 2022, the U.S. Energy Information Administration said. [EIA/S]
By Scott DiSavino
(Reuters) – U.S. energy firms this week cut the number of oil and rigs operating for a third week in a row to the lowest since December 2021, energy services firm Baker Hughes (NASDAQ:) said in its closely followed report on Friday.
The oil and gas rig count, an early indicator of future output, fell by four to 576 in the week to Jan. 24.
Baker Hughes said this week’s decline puts the total rig count down 45, or 7% below this time last year.
Baker Hughes said oil rigs fell by six to 472 this week, their lowest since December 2021, while gas rigs rose by one to 99.
In the Permian Basin in West Texas and eastern New Mexico, the nation’s biggest oil-producing shale basin, the rig count fell by six in the week to 298, the lowest since February 2022.
That six-rig decline in the Permian was the biggest weekly drop since August 2023.
The oil and gas rig count declined by about 5% in 2024 and 20% in 2023 as lower U.S. oil and gas prices over the past couple of years prompted energy firms to focus more on paying down debt and boosting shareholder returns rather than raising output.
Even though analysts forecast U.S. spot crude prices could decline for a third year in a row in 2025, the U.S. Energy Information Administration (EIA) projected crude output would rise from a record 13.2 million barrels per day (bpd) in 2024 to around 13.6 million bpd in 2025.
On the gas side, the EIA projected a 43% increase in spot gas prices in 2025 would prompt producers to boost drilling activity this year after a 14% price drop in 2024 caused several energy firms to cut output for the first time since the COVID-19 pandemic reduced demand for the fuel in 2020. [NGAS/POLL]
The EIA projected gas output would rise to 104.5 billion cubic feet per day (bcfd) in 2025, up from 103.1 bcfd in 2024 and a record 103.6 bcfd in 2023.
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