Commodities had a mixed month as key factors such as risk re-emerged, despite the continuing trade tensions between President Donald Trump and China, Brexit and the UK election and problems in Spain and Hong Kong.
Gold, the normal barometer of risk, had a poor month, iron ore bounced around and ended with a tiny gain, silver fell, but copper was flat.
A sharp fall in oil prices on Friday, trimmed November’s gain, as the much-anticipated approval of a production-cut extension at this week’s OPEC meeting grew more doubtful following a growing number of media reports.
OPEC meets in Vienna on December 5-6.
The post-Thanksgiving thin trading volumes also magnified the selling pressure and West Texas crude futures tumbled 5% in the session.
Bloomberg reported that Saudi Arabia will probably no longer be willing to compensate for excessive production by other OPEC members.
Saudi Arabia’s willingness to support overproduction by some other members has helped keep the production cap in place for the past 3 years. But the partial float of the Saudi Aramco oil company adds a big unknown to the OPEC and oil market politics.
Growing expectations for OPEC to extend the production cap beyond next March had driven oil prices to their highest since September as recently in the past week.
On top of the Bloomberg report, Russia’s Tass news agency report that the country’s Energy Minister Alexander Novak wants OPEC and its non-OPEC allies to make a decision closer to April on whether to extend the production cap deal.
Russia is considered to be part of OPEC+ with its role as a major producer and policy-influencer.
Traders say that unless there are more positive signs from the Saudis and Russians ahead of this week’s OPEC meeting, oil prices will come under further pressure in the next few days.
At Friday’s early close, January West Texas Intermediate crude futures were down $US2.94, or 5.1%, at $US55.17 a barrel in New York.
That saw a loss of 4.3% for the week which left the January contract up 1.8% for the month, the largest single-month percentage gain since June, according to Dow Jones.
In Europe, January Brent crude futures were down a more modest $US1.44, or 2.3%, at $US62.43 a barrel.
The January Brent expired at Friday’s close lost 1.5% for the week which, trimming its gain for the month to around 3.7%. That was the largest one-month gain for the front month since April.
The early release from Baker Hughes of weekly rig count data on Wednesday had no impact on prices. The US count was down one rig from last week to 802, with oil rigs down three to 668, gas rigs up two to 131.
The U.S. rig count is down 274 rigs from last year’s count of 1,076, with oil rigs down 219 and gas rigs down 58. The report is usually released on Friday.
The US Energy Information Administration reported on Friday that the US was a net exporter of oil for all of September – that was the first time since 1949 that the US has been a net exporter for at least a month.
It has a number of weeks in the past year where it has been a net exporter. The exported surplus averaged 89,000 barrels a day in September.
Meanwhile Comex gold for February delivery settled up $US7.40, or 0.5% at $US1,460.8 an ounce on yet more trade fears (magnified by the low volumes in the holiday-shortened session).
Comex gold ended the week down 0.6% and for the month it shed $US54.00, or 3.5%, its worst month since September, according to Dow Jones.
Comex March silver rose 14 cents, or 0.8% at $US17.055 an ounce on Friday, and down 0.8% for the week and a much larger 5.6% for all of November.
Comex March copper added 0.8%% at $US2.696 a pound to be down half a percent for the week and 0.02% for the month.
November saw global iron ore prices top the $US90 a tonne mark for a day before retreating.
The price of 62% Fe fines delivered to northern China ended at $US87.46 a tonne on Friday, down 65 cents a tonne from the day before.
That left it down slightly from the $US88.06 the previous Friday but up by just over 1% from the $US85.97 reported at October 31.