Except for oil, surprisingly, commodities did well in Friday’s bloodbath, led by gold, silver, copper, and iron ore.
Oil did rise on Friday but not nearly enough to wipe out the fourth weekly loss in a row. Wednesday’s buying spurt, triggered by a sharp rise in tensions in the Middle East, was not enough to reverse the trend, nor was the rise in prices off the back of the slide in sharemarkets and bond yields sufficient.
A tanking US economy on top of China’s weaknesses should normally be enough to knock the socks off oil and gas prices.
The OPEC+ Joint Ministerial Monitoring Committee met last week and recommended no change in the enlarged cartel’s policy.
West Texas Intermediate crude oil was down 3.5% at $US73.542 per barrel at settlement on Friday but later edged higher to end the week at $US74.14, still down 3% for the week. Brent also ended around 3% lower for the week at $77.56 a barrel.
Meanwhile, the number of active US oil rigs held steady for the week to last Friday, according to energy services company Baker Hughes.
Oil rig numbers remained unchanged at 482 for the week while gas rig numbers dropped by 3 to 98. Miscellaneous rigs were flat at six.
A year earlier, the US had 525 oil, 128 gas, and six miscellaneous rigs in operation. Overall, 586 rigs were operating in the US last week, down from 659 a year earlier.
West Texas Intermediate crude oil was down 3.5% at $73.67 per barrel in Friday late-afternoon trade, while Brent was falling 3.2% to $77 a barrel. Both were on course for a fourth consecutive weekly decline.
“Signs of disappointing global fuel demand growth outweighed fears of supply disruptions from rising Middle East tensions,” D.A. Davidson wrote in a note.
Earlier this week, Iran accused Israel of assassinating Hamas leader Ismail Haniyeh in Tehran and vowed to retaliate. As has been the case since October, “while tensions have built, it has had little to no impact on oil supply,” ING said Friday.