Oil prices succumbed to profit-taking and a stronger US dollar on Friday at the end of a week of gains that saw prices peak above US$73 a barrel.
New York’s main futures contract, light sweet crude for delivery in July, fell to US$72.04 a barrel, a drop of US$0.64 from Thursday’s close. In London, Brent North Sea crude for July delivery shed US$0.87 to settle at US$70.92 a barrel.
“The market probably went up a little bit too quickly and I suspect we see some profit taking,” Bart Melek of BMO Capital Markets said.
The New York contract had spiked about US$5 over the past three days, peaking at US$73.23 in intraday trading on Thursday, its highest level since last October.
On May 1, the price hovered around US$50 a barrel.
Ellis Eckland, an independent analyst, said that a firmer US dollar made dollar-priced oil more expensive for buyers using weaker currencies.
“Basically you can explain the whole move with the stronger dollar and the stock equities off a little bit,” he said.
The dollar’s recent weakness against most major currencies had supported the oil rally, as had several reports indicating a pickup in weak energy demand.
The market shrugged off an OPEC report suggesting that the worst of the impact from the global economic and financial crisis was past for the oil markets, as it fractionally reduced its demand estimate for this year.
PRECIOUS METALS: Gold prices slid after a recent rally toward US$1,000 an ounce.
“Gold moved lower ... following a higher US dollar,” ODL Securities analyst Marius Paun said.
By late Friday on the London Bullion Market, gold dropped to US$937.25 an ounce from US$962 a week earlier. Silver fell to US$15.07 an ounce from US$15.65.
On the London Platinum and Palladium Market, platinum slid to US$1,241 an ounce at the late fixing on Friday from US$1,275.
BASE METALS: Base metals prices struck multi-month highs for a second week running.
By Friday on the London Metal Exchange, copper for delivery in three months jumped to US$5,255 a tonne from US$5,055 a week earlier.
Three-month aluminum climbed to US$1,670 a tonne from US$1,588.
GRAINS AND SOYA: Soya and grains prices diverged.
By Friday on the Chicago Board of Trade, maize for delivery in July fell to US$4.32 a bushel from US$4.44 a week earlier.
July-dated soyabean meal — used in animal feed — increased to US$12.55 from US$12.25.
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