Commodities
Gold prices find support above $2,000, but still rangebound on rate woes
© Reuters
Investing.com– Gold prices rose in Asian trade on Monday, extending a rebound from one-month lows after recently breaking below a key support level, although fears of higher-for-longer U.S. rates kept prices largely rangebound.
The yellow metal had briefly broken below the $2,000 an ounce earlier in February, as stronger-than-expected U.S. inflation readings saw traders largely price out the prospect of early interest rate cuts by the Federal Reserve.
While gold rebounded back above the support level over the past two sessions, it still remained largely within a $2,000- $2,050 an ounce trading range established since mid-January. The yellow metal has struggled to make headway in the face of sticky U.S. inflation and a hawkish outlook for interest rates.
rose 0.3% to $2,019.95 an ounce, while expiring in April rose 0.4% to $2,031.15 an ounce by 00:37 ET (05:37 GMT).
Strength in the weighed on gold, as the greenback remained in sight of a three-month high after stronger-than-expected inflation data on Friday.
The reading came just days after a stronger-than-expected inflation reading for January. Sticky inflation gives the Fed less impetus to begin immediately loosening monetary policy, with a swathe of Fed officials having warned as much in recent weeks.
Focus is now on the for more cues on interest rates. The Fed had largely downplayed all bets on early rate cuts during the meeting.
Higher-for-longer rates bode poorly for gold, given that they increase the opportunity cost of investing in the yellow metal.
This notion weighed on other precious metals. fell 0.3%, while fell 1.3%.
Copper prices slip, China cues in focus
Among industrial metals, copper prices fell on Monday, but were sitting on strong gains from the prior week on hopes of improving economic conditions in China.
expiring in March fell 0.4% to $3.8083 a pound, after surging over 4% in the prior week.
Data showing increased consumer spending in China, over the Lunar New Year holiday, ramped up hopes over a broader economic recovery in the world’s largest copper importer.
Commodities
Oil settles down on US jobs data, steepest weekly loss in 3 months
By Nicole Jao
NEW YORK (Reuters) -Oil prices settled lower on Friday, and posted their steepest weekly loss in three months as investors weighed weak U.S. jobs data and possible timing of a Federal Reserve interest rate cut.
futures for July settled 71 cents lower, or 0.85%, to $82.96 a barrel. U.S. West Texas Intermediate crude for June fell 84 cents, or 1.06%, to $78.11 a barrel.
Investors were concerned that higher-for-longer borrowing costs would curb economic growth in the U.S., the world’s leading oil consumer, after the Federal Reserve decided this week to hold interest rates steady.
For the week, Brent declined more than 7%, while WTI fell 6.8%.
U.S. job growth slowed more than expected in April and the annual wage gain cooled, data showed on Friday, prompting traders to raise bets that the U.S. central bank will deliver its first interest rate cut this year in September.
“The economy is slowing a little bit,” said Tim Snyder, economist at Matador Economics. “But (the data) gives a path forward for the Fed to have at least one rate cut this year,” he said.
The Fed held rates steady this week and flagged high inflation readings that could delay rate cuts. Higher rates typically weigh on the economy and can reduce oil demand.
The market is repricing the expected timing of possible rate cuts after the release of softer-than-expected monthly jobs data, said Giovanni Staunovo, an analyst at UBS.
U.S. energy companies this week cut the number of oil and rigs operating for a second week in a row, to the lowest since January 2022, Baker Hughes said in its closely followed report on Friday.
remove ads
.
The oil and gas rig count, an early indicator of future output, fell by eight to 605 in the week to May 3, in the biggest weekly decline since September 2023. The number of oil rigs fell seven to 499 this week, in the biggest weekly drop since November 2023. [RIG/U]
Geopolitical risk premiums due to the Israel-Hamas war have faded as the two sides consider a temporary ceasefire and hold talks with international mediators.
Further ahead, the next meeting of OPEC+ oil producers – members of the Organization of the Petroleum Exporting Countries and allies including Russia – is set for June 1.
Three sources from the OPEC+ group said it could extend its voluntary oil output cuts beyond June if oil demand does not increase.
Money managers cut their net long futures and options positions in the week to April 30, the U.S. Commodity Futures Trading Commission (CFTC) said.
Commodities
Oil prices fall as hefty weekly losses loom on bets on tighter supplies suffer hit
Investing.com– Oil prices fell Friday, to remain on course for steep losses this week even as the dollar weakened following a weaker-than-expected U.S. jobs report, while data pointing to rising U.S. supplies reined in bets for tighter markets.
At 14:10 ET (18:10 GMT), fell 0.6% to $84.20 a barrel, while gained 0.6% to $79.44 a barrel. Oil prices are trading close to their weakest levels in seven weeks, and were set to lose between 5% and 6% this week.
Weaker dollar fails to turn negative tide as crude set for hefty weekly losses
The dollar fell as rate-cut hopes were boosted by data showing tight U.S. labor market is cooling after job gains and wages fell in April.
“Our forecast remains for three 25bp cuts this year starting in July, but have highlighted the path to cut in July has gotten narrower following the reinflation in 1Q24 data,” Morgan Stanley said in a Friday note.
As oil is priced in dollar, a weaker dollar tends to boost demand for non-dollar investors. Despite the dollar weakness was of little comfort to oil prices as most of the damage occurred earlier this week following an unexpected build in U.S. and data showing increased U.S. production.
This was coupled with easing fears of supply disruptions in the Middle East, as Israel and Hamas continued negotiations over a potential ceasefire.
Baker Hughes rig count dips below 500
Oilfield services firm Baker Hughes Co (NYSE:BKR) reported its weekly U.S. rig count, a leading indicator of future production, rose fell 499 from 506, pointing to weaker drilling activity even as the demand-heavy U.S. summer driving season approach.
remove ads
.
But the fall in rigs just as domestic output is rising suggest that drillers are squeezing more out of existing wells.
OPEC+ could extend production cuts
Still, crude found some relief on Friday from a softer , as the greenback retreated in anticipation of the nonfarm payrolls data.
Also helping the tone was a report from Reuters that the Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, could potentially maintain their current run of 2.2 million barrels per day of production cuts beyond the end-June deadline, especially if demand does not pick up.
But cartel members are yet to begin formal talks over the matter. Still, extended production cuts by the cartel could herald tighter markets later in 2024.
Adnoc, the UAE’s national oil company, has increased its production capacity by 200,000 barrels per day to 4.85 million b/d, leaving the producer with a spare capacity above 1.7m b/d, after producing a little over 3.1m b/d in April.
“This could see the UAE push for a higher baseline when OPEC+ discusses its output policy for the second half of 2024,” ING added.
(Peter Nurse, Ambar Warrick contributed to this article.)
Commodities
Oil prices set for steep weekly losses; payrolls could drive sentiment
Investing.com– Oil prices edged higher Friday, lifting from near seven-week lows, but were headed for steep losses this week as signs of robust U.S. stockpiles and production dashed hopes for tight crude markets in the coming months.
At 08:05 ET (12:05 GMT), rose 0.6% to $84.20 a barrel, while gained 0.6% to $79.44 a barrel.
Crude set for hefty losses this week
Despite these gains, both contracts were still trading close to their weakest levels in seven weeks, and were set to lose between 5% and 6% this week.
An unexpected build in U.S. and data showing increased U.S. production suggested that oil markets were not as tight as traders were initially hoping.
This was coupled with easing fears of supply disruptions in the Middle East, as Israel and Hamas continued negotiations over a potential ceasefire.
Concerns over slowing economic growth – which could eat into demand – also came into play this week, especially after the U.S. Federal Reserve warned that it will keep interest rates higher for longer.
Middling data from top crude importer China also factored into fears of sluggish demand. Business activity in the country was seen slowing in April after a strong start to the year.
Markets were also on edge ahead of the release of key U.S. data later in the day, which is likely to factor into the outlook for interest rates.
“The US jobs report which will be released later today, has the potential to be a key driver for oil prices in the immediate term,” analysts at ING said, in a note.
remove ads
.
OPEC+ could extend production cuts
Still, crude found some relief on Friday from a softer , as the greenback retreated in anticipation of the nonfarm payrolls data.
Also helping the tone was a report from Reuters that the Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, could potentially maintain their current run of 2.2 million barrels per day of production cuts beyond the end-June deadline, especially if demand does not pick up.
But cartel members are yet to begin formal talks over the matter. Still, extended production cuts by the cartel could herald tighter markets later in 2024.
Adnoc, the UAE’s national oil company, has increased its production capacity by 200,000 barrels per day to 4.85 million b/d, leaving the producer with a spare capacity above 1.7m b/d, after producing a little over 3.1m b/d in April.
“This could see the UAE push for a higher baseline when OPEC+ discusses its output policy for the second half of 2024,” ING added.
(Ambar Warrick contributed to this article.)
- Forex2 years ago
Forex Today: the dollar is gaining strength amid gloomy sentiment at the start of the Fed’s week
- Forex2 years ago
How is the Australian dollar doing today?
- Forex1 year ago
Unbiased review of Pocket Option broker
- Forex2 years ago
Dollar to pound sterling exchange rate today: Pound plummeted to its lowest since 1985
- Cryptocurrency2 years ago
What happened in the crypto market – current events today
- World2 years ago
Why are modern video games an art form?
- Stock Markets2 years ago
Morgan Stanley: bear market rally to continue
- Economy2 years ago
Crude oil tankers double in price due to EU anti-Russian sanctions