With the U.S. dollar dropping following a blustering first press conference by Donald Trump during which little was mentioned on his intended trade and infrastructure spending policies and the focus was on railing against the intelligence services, oil prices are rising. Dollar weakness apart, oil is also being boosted by rising demand from China and positive comments by OPEC Secretary General Mohammad Barkindo.
Barkindo, speaking in Abu Dhabi at the Atlantic Council’s Global Energy Forum asserted that the commitment of both OPEC and non-OPEC members to export cut promises is ‘unparalleled’. This is backed up by BMI Research data showing that 12 days into the pact compliance levels have already reached 73%. Iraq, the target of most compliance doubts, also sought to reassure that it is sticking to its side of the deal with oil minister Jabbar al-Luaib confirming 170,000 bpd have already been cut with another 40,000 to follow this week. The strength of his insistence that the country will not deviate from the official commitment, an answer to suspicions that the country would attempt to funnel up to 100,000 bpd for sale via neighbor Iran, has given markets some reassurance.
Chinese data released today also showed the country’s November oil consumption had hit record levels of 11.44 million barrels a day, up 4.1% on the same month in 2015. February futures for WTI climbed 0.5%, to $52.49 in the U.S. yesterday with Brent crude for March adding 0.7% to $55.46 in London. This morning Brent crude futures rose 25 cents to $55.35 and WTI 5 cents to $52.30.
Gold prices have been continuing their recent upward curve, also boosted by the falling dollar. Spot prices in London this morning rose 0.5 percent to $1,196.06 oz. and have since reclaimed the $1200 level. Comex gold futures have added 0.73% today.
Base metals gave up some gains yesterday on the LME, down by an average of 1.1% by close. China’s May iron ore prices are up 2.1% and steel rebar prices 1% on SHFE.