Nymex Oil Futures Rebound From 12-Year Low -- Update
February 12 2016 - 1:09AM
Dow Jones News
By Biman Mukherji
Oil-futures prices on the New York Mercantile Exchange rebounded
Friday on short-covering after touching a more than 12-year low the
previous day.
Light, sweet crude futures on Nymex for delivery in March traded
at $27.68 a barrel at 0500 GMT, up $1.47 in the Globex electronic
session. April Brent crude on London's ICE Futures exchange rose
$1.73 to $31.79 a barrel.
Prices touched a low of $26.05 a barrel a day ago, the lowest
settlement since May 6, 2003, as the market largely ignored a drop
in weekly U.S. crude-oil inventories. A supply glut has dragged
prices down over the past two years.
The plunge in prices got some respite when traders moved in to
cover their short positions. Late Thursday, The Wall Street Journal
reported that the United Arab Emirates energy minister said current
prices have forced non-Organization of the Petroleum Exporting
Countries producers to at least cap output increases.
Market sentiment firmed up after the U.A.E. energy minister said
OPEC was ready to cooperate on production cuts, though few believe
such an outcome would materialize.
"We view this as further jawboning, with the likelihood of a
coordinated response on supply cuts very low," according to an ANZ
Bank report.
The International Energy Agency and the U.S. Energy Information
Administration said this week they expect the oversupply to persist
for months, keeping prices low.
"We do believe that Brent and [West Texas Intermediate] prices
will rebound in the second half of 2016 as more aggressive cutbacks
in production are forthcoming, particularly in the U.S.," said John
Davies, head of commodities research at BMI Research.
The firmer sentiment in crude oil put the spotlight on the
recent price divergence in gold, which fell after touching a
one-year high the previous day.
Spot gold was trading at $1,233.74 a troy ounce, down from the
previous close of $1,246.57 a troy ounce. It briefly pushed above
$1,260 a troy ounce a day ago on rising demand for safe-haven
assets that has made it the standout commodity this year.
Industrial metals also found some support on short covering,
with nickel leading the gains. Three-month nickel futures on the
London Metal Exchange rose 1.4% to $7,705 a metric ton Friday,
after mirroring oil's plunge to a 12-year low the previous day.
Copper prices rose 0.7% to $4,478 a ton, while aluminum futures
were up 0.6% at $1,493.50 a ton.
The respite in falling metal prices may prove to be temporary,
analysts said, until more evidence of production cuts by producers
including in China filters through to markets.
Write to Biman Mukherji at biman.mukherji@wsj.com
(END) Dow Jones Newswires
February 12, 2016 00:54 ET (05:54 GMT)
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