Commodity Capsule: Brent crude oil stable; gold drops; copper rises

Commodity Capsule: Oil prices stalled on Friday over a forecast of slowing demand by the International Energy Agency.

Brent crude futures hover under $83 a barrel. US WTI crude futures edged past $78 a barrel.

Both contracts climbed over 1 per cent on Thursday as a larger-than-expected drop in US retail sales prompted hopes Federal Reserve will soon start cutting interest rates.

US Commerce Department report showed retail sales dropped 0.8 per cent in January, the biggest fall since February 2023.

Weighing on market sentiment, the International Energy Agency said on Thursday that global oil demand growth was losing momentum and trimmed its 2024 growth forecast, in sharp contrast to the view held by the Organization of the Petroleum Exporting Countries (OPEC).

IEA's monthly report said it expects global oil demand to grow by 1.22 million barrels per day this year, slightly down from last month's estimate. OPEC on Tuesday stuck to its much steeper growth forecast of 2.25 million bpd.

Analysts said the risk of a wider Middle East conflict could continue to guide crude prices.

Gold prices were set for a second straight weekly drop on Friday after surprisingly hot US consumer prices led traders to reassess their rate-cut hopes.

Bullion recouped some of the losses, in the previous session, following a slump in US consumer spending.

US gold futures past $2,010 per ounce.

Bullion rose on Thursday after data from US Commerce Department showed retail sales dropped 0.8 per cent last month on its biggest fall since February 2023.

Other data showed initial jobless claims fell by 8,000 to a seasonally adjusted 212,000 for the week ended Feb. 10, slightly below the 220,000 estimate.

Atlanta Fed President Raphael Bostic said on Thursday that while the US central bank had made a lot of progress lowering inflation pressures, ongoing risks mean that he was not yet ready to call for interest rate cuts.

Copper prices rose to a one-week high on Friday as weaker-than-expected U.S. retail sales data revived hopes for an interest rate cut from the Federal Reserve in June and lifted risk sentiment among investors.

Copper on London Metal Exchange moved near $8,350/metric ton, hitting its highest since Feb. 8. Contract is up more than 2 per cent so far this week.

US retail sales fell more than expected in January, pulled down by declines in receipts at auto dealerships and gasoline service stations.

The dollar index edged to 104.35, having slipped 0.4 per cent on Thursday after a mixed set of US economic data.

According to CME Fed Watch Tool, traders now see a 78 per cent chance of a rate cut in June.

Copper is down more than 3 per cent this month on concerns about demand from China and its property sector in particular.

Activity has been muted this week as China celebrates the Lunar New Year.

Catch the latest stock market updates here. For all other news related to business, politics, tech and auto, visit Zeebiz.com.