OPEC Output Drops To Four-Year Low

By Glenn Dyer | More Articles by Glenn Dyer

Oil and gold futures climbed Friday to notch up gains for the week.

Gold also appeared to get a boost from renewed optimism over prospects for a US-China trade deal and weakness in the US dollar after the Christchurch Mosque massacre stunned traders.

The US dollar lost around 0.8% against a basket of major currencies.

Comex gold for April delivery rose $US7.80, or 0.6% on Friday, to settle at $US1,302.90 an ounce, a weekly rise of 0.3%.

May silver also rose 15.3 cents, or 1%, to $15.324 an ounce, but lost 0.2% over the week.

China’s state media cited “concrete progress” on the text of a trade agreement while Premier Li Keqiang, the country’s No. 2 leader behind President Xi Jinping, reiterated the government’s capacity to use stimulus to boost economic growth, Reuters, Bloomberg, and other services reported.

In other metals, June palladium ended up $US3.90, or 0.3%, to end at a record of $US1,518.50 an ounce, its second record close in a row. Palladium futures jumped 4.1% higher for the week.

April platinum futures were also stronger, rising $US4.70, or 0.6%, to $US831.80 an ounce — a rise of 1.7% for the week.

And Comex May copper ended the session on Friday up 1.45 cents, or 0.5%, at $US2.906 a pound, for a weekly rise of 0.4%.

Metal Bulletin index ore prices rose by less than $US1 a tonne over the week, ending at $US86.52 for 62% Fe ore delivered to northern China. That compared to a $US85.77 close the week before.

The Metal Bulletin 62% index jumped 2.9% to $US87.26 a tonne on Thursday, leaving it at a one-week high.

Data out on Thursday revealed that China’s crude steel production surged to 149.58 million tonnes in January and February, up 9.2% on the same period a year earlier, and much stronger than all forecasts.

And another solid week for crude oil with both West Texas Intermediate (WTI) and Brent ending higher.

Crude-oil futures finished lower on Friday, with WTI futures pulling back after four days of gains that produced its best weekly gain in about a month.

April West Texas Intermediate crude shed 9 cents, or 0.2%, to settle at $US58.52 a barrel in New York on Frida, a day after settling at its highest level since the middle of November.

WTI tallied a weekly gain of about 4.4% based on the most-active contracts, which marked its sharpest weekly rise in a month.

May Brent crude meanwhile, lost 7 cents, or 0.1%, to $US67.16 a barrel in Europe, with the contract up 2.2% for the week.

On Friday, the International Energy Agency said output from the OPEC members had fallen by 240,000 barrels a day in February, to 30.68 million barrels day, its lowest level in four years. The IEA cited falling output from stricken Venezuela, and lower output from Saudi Arabia and Iraq.

It left its forecast for global oil demand growth in 2019 unchanged at 1.4 million barrels a day.

The IEA report came a day after OPEC reported a similar fall for February.

Over the weekend, the OPEC, non-OPEC Joint Ministerial Monitoring Committee assembled in Azerbaijan, with an official meeting scheduled for today (Monday) to review compliance with production cuts.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

View more articles by Glenn Dyer →