Oil prices dropped as COVID-19 cases remained high in India
On Friday, Oil prices dropped after falling nearly 3% a day earlier as COVID-19 cases remained high in major oil consumer India. Moreover, a key fuel pipeline in the United States continued operations after being closed due to a cyber attack.
Brent crude oil futures dipped 35 cents, which equals 0.5%, and traded at $66.70 a barrel. Meanwhile, West Texas Intermediate (WTI) declined by 28 cents, or 0.4%, and settled at $63.54 a barrel.
According to Edward Moya, senior market analyst at OANDA, the commodity super cycle rally just hit a hard stop. He added that the energy market doesn’t know what to make of Wall Street’s fixation over inflation and the slow flattening of the curve in India. India is the world’s third-largest oil consumer.
He also added that the crude demand story is still upbeat for the second half of the year, preventing any significant declines in oil prices.
Prices came under pressure as a broader rise in commodity prices, labor shortage, and much stronger-than-anticipated U.S. consumer prices data this week stoked inflation concerns that could force the Federal Reserve to lift interest rates.
Increasing rates typically raise the U.S. dollar, which in turn pressures oil prices as it makes crude more expensive for holders of other currencies.
India recorded more than 4,000 coronavirus deaths for a second straight day on May 13 as infections stayed below 400,000, with experts unsure when numbers will peak.
firmer dollar and growing U.S. Treasury yields dampened the gold’s appeal
Gold prices slumped on Friday and were on track for a weekly loss, as firmer dollar and growing U.S. Treasury yields dampened the metal’s safe-haven appeal.
Spot gold dipped by 0.3% and traded at $1,821.89 per ounce. For the week, bullion has dropped almost 0.5%. U.S. gold futures fell 0.1% at $1,822.10.
Moreover, among other precious metals, silver dropped 0.5% to $26.92, while platinum gained 0.7% at $1,214.18. Additionally, palladium rose by 0.7% to $2,882.25 per ounce, but it was set for a second straight weekly loss with a decline of around 1.5%.
