Crude oil futures - Weekly outlook: April 8 - 12

                    New York-traded crude oil futures ended Friday’s session at a two-week low, after a weaker-than-forecast U.S. nonfarm payrolls report for March fuelled fears that the economic recovery is losing momentum, reducing hopes for higher oil demand.



                  Crude Oil traders have long been taking cues from the monthly jobs report, the most-closely followed indicator of U.S. employment, because it offers insight into the economic health of the world's biggest crude oil consumer.  

A deteriorating economy is generally correlated with decreased demand for oil and fuel products like gasoline.

On the New York Mercantile Exchange, light sweet crude futures for delivery in May shed 0.25% Friday to settle the week at USD93.02 a barrel by close of trade.

Nymex oil prices fell to a session low of USD91.97 earlier Friday, the weakest level since March 21. On the week, New York-traded oil futures lost 4.3%, the biggest weekly decline since September 21.

CrudeOil prices came under heavy selling pressure after the U.S. Department of Labor said the economy added 88,000 jobs last month, the smallest increase since last June and far below forecasts for an increase of 200,000. 

The data also showed that the unemployment rate ticked down to 7.6% from 7.7% in February, but the decline stemmed from more people dropping out of the labor force. The labor participation rate fell to 63.3%, the lowest level since 1979. 

But losses were limited as the dismal jobs report eased recent jitters the Federal Reserve would start to withdraw its super easy monetary policy, weighing on the U.S. dollar.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, fell 0.2% to end the week at 82.67.

Dollar-denominated oil futures contracts tend to rise when the dollar falls, as this makes oil cheaper for buyers in other currencies.

Oil prices were lower earlier in the week due to a number of disappointing economic reports from the euro zone and the U.S, while a surge in U.S. crude inventories to the highest level since 1990 further weighed.

In the week ahead, investors will be awaiting Wednesday’s minutes of the Fed’s March policy meeting for further hints on the future of its monetary policy.

Market participants will also be watching data on industrial production from Germany and the euro zone amid concerns over the deteriorating economic outlook for the region.

Oil traders will also be looking ahead to a flurry of Chinese economic reports due later in the week to further gauge the strength of the world’s second largest economy. 

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for May delivery tumbled 1.9% Friday to settle the week at USD104.35 a barrel. Earlier Friday, Brent prices fell to a session low of USD103.64 a barrel, the weakest level since July 26.

The London-traded Brent contract lost 5.25% over the week, while the spread between the Brent and the crude contracts narrowed to USD11.33 a barrel, the smallest gap since June.

The spread between the two contracts continued to trade near a nine-month low, due to an improving production outlook in the North Sea and amid growing concerns over the euro zone’s economic outlook. 

At the same time, U.S. oil stockpiles at Cushing, Oklahoma, the delivery point for Nymex oil futures, are declining as new pipelines relieve a supply glut there. 
Courtesy : Investing.com

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Natural gas futures - Weekly outlook: April 8 - 12

                   Natural gas futures ended Friday’s session at a 20-month high, as sentiment on the commodity was boosted amid receding concerns over U.S. inventory levels.

On the New York Mercantile Exchange, natural gas futures for delivery in May soared 4.95% Friday to settle the week at USD4.142 per million British thermal units by close of trade.

Earlier in the day, Nymex gas prices rose to USD4.145 per million British thermal units, the strongest level since August 3, 2011.

On the week, natural gas prices rallied 4.5%, the seventh consecutive weekly advance.

On Thursday, the U.S. Energy Information Administration said that natural gas storage fell by 94 billion cubic feet last week, above expectations for a drop of 91 billion cubic feet.

Inventories increased by 43 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a build of 4 billion cubic feet.

Total U.S. natural gas storage stood at 1.687 trillion cubic feet as of last week, 32% lower than last year at this time and 2.1% below the five-year average for this time of year. Gas inventories had held above the five-year average since September 2011.

Early withdrawal estimates for this week’s storage data range from 20 billion cubic feet to 36 billion cubic feet. Inventories rose by 11 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a rise of 15 billion cubic feet.

Prices found further support after industry weather group MDA Federal predicted cold weather in the Northeast and unusually cold weather in parts of the Midwest in the coming week.

Natural-gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting forecasts for late-winter heating demand and early-spring cooling needs. 

Nymex gas prices have risen sharply in recent months, gaining almost 20% since the start of 2013, boosted by calls for colder temperatures in major consuming regions across the U.S. that helped tighten the market.

Wall Street investment bank Goldman Sachs said Friday that it expected natural gas prices to average USD4.50 per million British thermal units in the second half of 2013, citing increasing U.S. demand and lower production levels.  

Still, some analysts have warned that further gains may be limited with spring's low-demand shoulder season looming.

Gas use typically hits a seasonal low with spring's mild temperatures, before warmer weather increases demand for gas-fired electricity generation to power air conditioning.

Elsewhere in the energy complex, light sweet crude oil futures for May delivery settled at USD93.02 a barrel by close of trade on Friday, losing 4.3% on the week. 

Meanwhile, heating oil for May delivery dropped 4.1% over the week to settle at USD2.923 per gallon by close of trade Friday.
Courtesy : Investing.com

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Gold futures - Weekly outlook: April 8 - 12

              Gold futures ended sharply higher on Friday, as investors bought the precious metal after U.S. nonfarm payroll figures indicated the Federal Reserve will continue to support the fragile economic recovery in the U.S.

Fed Chairman Ben Bernanke said recently that the central bank won't alter its aggressive monetary easing until it is convinced the economy's gains can be sustained.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank could bring quantitative easing, one of the biggest boosts to gold’s bull run, to an end this year.
 
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery surged 1.8% on Friday to settle the week at USD1,580.65 a troy ounce. 

Gold prices were likely to find support at USD1,539.85 a troy ounce, the low from April 4 and an 11-month low and resistance at USD1,604.25, the high from April 2.

Gold prices found strong support after the U.S. Department of Labor said the economy added 88,000 jobs last month, the smallest increase since last June and far below forecasts for an increase of 200,000. 

The data also showed that the unemployment rate ticked down to 7.6% from 7.7% in February, but the decline stemmed from more people dropping out of the labor force. The participation rate fell to 63.3%, the lowest level since 1979. 

The dismal jobs report fuelled fears that the recovery in the labor market is losing momentum, easing recent jitters the Fed would start to withdraw its super easy monetary policy.

The central bank previously stated that monetary policy will remain accommodative “at least as long” as the jobless rate remains above 6.5%.

Despite Friday’s strong gain, Comex gold futures prices posted a loss of 1% on the week. 

On Thursday, Comex gold prices fell to an 11-month low as a bout of technical selling kicked in after prices broke below key support levels, triggering fresh sell orders amid bearish chart signals.

In the week ahead, investors will be awaiting Wednesday’s minutes of the Federal Reserve’s March policy meeting for further hints on the future of its monetary policy.

Market participants will also be watching data on industrial production from Germany and the euro zone amid concerns over the deteriorating economic outlook for the region.

Sentiment on the euro remained fragile amid ongoing concerns over the situation in Cyprus and ongoing political uncertainty in Italy.

Elsewhere on the Comex, silver for May delivery rallied 1.9% on Friday to settle the week at USD27.26 a troy ounce. Despite Friday’s strong performance, silver future prices lost 3.5% on the week. 

Comex silver fell to USD26.58 a troy ounce on Thursday, the lowest since July 12. Silver has been on the decline given “weak industrial demand and mixed investor interest,” analysts at Barclays wrote in a research note Friday.

Meanwhile, copper for May delivery shed 0.2% on Friday to close the week at USD3.345 a pound. On the week, Comex copper prices lost 0.7%. 

Comex copper prices fell to an eight-month low of USD3.306 a pound on Thursday.

Copper traders will be looking ahead to a flurry of Chinese economic reports due later in the week to further gauge the strength of the world’s second largest economy and the largest consumer of the red metal.
Courtesy : Investing.com

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