Brent futures climbed 2.4% last week, while U.S. West Texas Intermediate advanced 4.6%. The curbs of 2 million barrels a day will remain until the end of June, and Saudi Arabia makes up half of the promised cuts to production.
Turning to metals, gold, silver, platinum and palladium traded in green, with bullion supported by expectations of a June rate cut following last week’s economic data. The next major U.S. economic release will be February’s employment report, due on Friday. Lower interest rates tend to boost the appeal of non-yielding bullion. Spot gold (XAUUSD:CUR) was little changed $2,084.05 by an ounce by 6 am ET.
“A bullish push towards previous all-time high at around $2,134 is in the cards. However, on the medium-term gold could push higher,” Saxo Bank’s Ole Hansen said, adding that, on the weekly chart, gold has retraced just above the 0.618 retracement at $2,077. If taking out the December 2023 peak and all-time, there could be potential to the 1.382 projection at $2,191.
Among base metals, prices of most came under pressure after data showed that China’s factory output shrank for a fifth straight month, suggesting weak demand. “This wasn’t helped by aluminum inventories rising to their highest level since May 2023. Nickel prices fell amid further warnings of a chronically oversupplied market,” ANZ reported.
“An Indonesian government official said that prices are unlikely to rise above $18,000/t because the country will ensure the market remains well supplied to keep costs low for electric vehicle manufacturers. Indonesia is implementing plans to assuage concerns about compliance with ESG issues in an effort to seek deals with the US EV sector that is off limits to the Chinese,” the note added.
Elsewhere, among agriculture commodities, prices of soybean and cocoa rose, while wheat fell.The latest CFTC data show that money managers increased their net bearish bets in CBOT soybeans by 23,976 lots for the fifteenth straight week to 160,653 lots as of 27 February, the most bearish bets since May 2019, ING reported.
“Meanwhile, speculators continue to reduce their bullish bets in cocoa despite prices moving higher amid market expectations for a supply deficit this year.” Money manager decreased their net bullish bets in ICE cocoa by 10,445 lots for a fifth consecutive week to 32,328 lots (the least bullish since March 2023) over the last reporting week following the decline in gross shorts by 12,846 lots, the report added.
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