Oil Prices Recover after Earlier Decline

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Oil prices has rebounded on Friday after falling earlier which  caused distress in markets resulting in traders and investors to seek refuge in safe-haven bonds, triggering the yen and gold to haul up a record-breaking high for the world stock market.

As of 14:07 GMT, gold futures for the June contract is currently 0.02 percent down to $1,228 while spot exchange rate for Japanese yen fell 0.01 percent against the US dollar to $0.008883.

Traders had to seek out for shelter overnight as US crude oil WTI futures for June delivery fell 0.3 percent to $45.38 a barrel as of 13:28 GMT, off the six-month low of $43.77 target but it is still under constant worry  in the course of continuous global supply glut concerns.

Crude has recovered from its previous decline gaining 0.5 percent to $45 a barrel.

Brent oil futures for the July contract was up 0.8 percent to $48 a barrel after hitting a six-month low of $46.65 the previous session.

Hong Kong’s PetroChina and CNNOOC also closed their session with a 2 percent loss to HK$5.26 and 0.7 percent low to HK$8.85 respectively.

Oil was not the only commodity to encounter declines this week. Chinese iron ore edged down almost 7 percent in Shanghai overnight after falling 8 percent on Thursday.

Mining giant Rio Tinto (RIO) closed 2 percent down to AU$57.150 hitting a six-month low, while Glencore PLC (GLEN) is up almost 2 percent to £282.70 and copper miner Antofagasta rose 1 percent to £760 on Friday.

Some of the world’s most sensitive commodity currencies went downside with the Australian dollar losing 0.1 percent to $0.7399 the same goes for the Russian ruble also 0.1 percent low to $0.01711. The Canadian dollar broke the trend gaining 0.1 percent to $0.7284.

Crude prices has been under pressure after the US Energy Information Administration said in its weekly report that crude oil inventories fell by 930,000 barrels in the week ended April 28 which was a much smaller take than expected.

Back in November last year, the Organization of the Petroleum Exporting Countries or OPEC together with other manufacturers including Russia came to an agreement to cut production by about 1.8 million barrels per day between January and June yet the output cut has had little effect on inventory levels.

A final decision on whether or not to extend the agreement beyond June will be discussed by the oil union on May 25.

Other commodities were also up on Friday with silver futures increasing 0.1 percent to $16.334 and copper steady at 0.02 percent to $2.511.

Meanwhile, the Indonesian government is asking $2 billion in reimbursement from Thailand’s state oil company and its Australian division due to an oil spill in the Timor Sea nearly eight years ago.

The lawsuit was said to be registered last Wednesday at the Central Jakarta District Court in an attempt to seek justice for the oil spill at the Mondara oil field that started on August 21, 2009.

The demand for compensation includes $1.7 billion for environmental damage and $330 million for restoration work.

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