“Oil Prices Take a Turn: A Market Update for September 14th”

Oil Prices Slip

Oil prices slipped as U.S. Gulf of Mexico oil production resumed after Hurricane Francine, and data showed a weekly rise in U.S. oil rigs.

Brent crude futures fell 36 cents, or 0.5%, to $71.61 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 32 cents, or 0.5%, to $68.65. However, for the week, Brent rose 0.8% and WTI gained 1.4%.

Bob Yager, Mizuho’s energy director in New York, said, “As production and refining in the U.S. Gulf Coast resumed, investors chose to sell off oil contracts at the end of the week.”

The Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) both lowered their forecasts for oil demand growth this week as the economy of China, the world’s top oil importer, slowed.

U.S. oil inventories rose in the previous week due to increased crude imports and lower exports, while fuel demand weakened, said the Energy Information Administration (EIA).

U.S. Natural Gas Prices Fall

U.S. natural gas prices fell as traders sold off to take profits after prices rose to a two-month high earlier in the session, supported by forecasts of higher demand and lower production in recent days due to Hurricane Francine.

October natural gas futures on the New York Mercantile Exchange fell 5.2 cents, or 2.2%, to $2.305 per mmBtu.

Gold Prices Soar

Gold prices soared, breaking a record high, boosted by expectations that the U.S. Federal Reserve will cut interest rates soon and a weaker U.S. dollar.

Spot gold on the LBMA rose 0.9% to $2,582.04 an ounce. Gold futures for December delivery on the New York Mercantile Exchange rose 1.2% to $2,610.70 an ounce.

Gold prices surged to a new record high and are expected to climb towards $3,000 an ounce, driven by easy monetary policies of major central banks and the intense U.S. presidential election race.

Copper, Aluminum, and Zinc Prices Hit Two-Week Highs

Copper prices hit a two-week high and posted their biggest weekly gain since July, supported by a weaker U.S. dollar and expectations of economic stimulus in top consumer China, which would boost demand.

Three-month copper on the London Metal Exchange rose 0.9% to $9,297.50 a ton after touching $9,314.50, the highest since Aug. 30. Aluminum and zinc also hit two-week highs.

However, copper prices have fallen 16% since the May peak of $11,104, when speculative buying drove prices higher due to concerns about potential shortages in future supply.

The U.S. dollar has come under pressure, making metals priced in the U.S. currency more attractive to buyers holding other currencies, as the Federal Reserve is expected to cut interest rates next week.

Shanghai copper inventories fell 45% in the past three months to 185,520 tons, the lowest since February.

Analysts at Macquarie expected copper prices to average $9,100 a ton this quarter before recovering in the fourth quarter of 2024.

On the London Metal Exchange, aluminum prices rose 2.5% to $2,475 a ton, zinc gained 2% to $2,912.50, while nickel, lead, and tin also climbed.

Iron Ore Prices Fall, Steel Rises

Iron ore prices on the Dalian Commodity Exchange fell but posted weekly gains, supported by China’s new economic stimulus plans and recovering steel demand, despite the slow recovery of the top consumer’s economy.