Oil rises on potential OPEC cut extension, but still faces 2nd weekly loss

Gold Unable to Hold Gains after Optimistic Comments from ECB’s Draghi.

While the European Central Bank is committed to its bond-purchase program at least to the end of the year, the euro and in turn gold prices saw a brief spike Thursday as the central bank appears to be more optimistic about the economy. According to currency analysts, the euro rallied to session highs as investors focused on the comment from ECB President Mario Draghi, in his opening statement, that “the cyclical recovery of the euro area economy is becoming increasingly solid and that downside risks have further diminished.” In the question-and-answer period, he added that the compared to three years ago, when the recovery was fragile, it is now “solid and broad-based.” Gold saw some modest renewed buying interest after the euro spiked higher, but the momentum didn’t last with June Comex gold futures last trading at $1,265.20 an ounce, relatively unchanged on the day and near a two-week low.

China Hopes to Friendly Solve Aluminum Related Issue with US.

In response to restrictive measures on aluminum imports taken by the US recently, China wishes to solve these issues through consultation and dialogue, Xinhua News Agency reported April 27, citing press spokesman for the Ministry of Commerce as saying. The US has conducted a series of trade remedy measures against Chinese aluminum industry, including 332 investigation, administrative review on imported aluminum extrusions, anti-subsidy and anti-dumping probe into Chinese aluminum foil, etc. Most aluminum extrusion producers in Tianjin have closed, hurting local consumption and pushing aluminum ingot stocks there up to 40,000 tonnes as of April 27. Since aluminum extrusion capacity in the region accounts for only a small share of national total capacity, the closures there will have limited impact on aluminum demand nationwide, SMM explained.

Oil rises on potential OPEC cut extension, but still faces 2nd weekly loss.

Oil prices rose on Friday but were still on track for a second straight weekly loss on concerns that an OPEC-led production cut has failed to significantly tighten an oversupplied market.

Traders said that Friday's rises came on the back of OPEC saying it was keen to find a deal that would ensure a drawdown of excess fuel supplies. OPEC and other producers including Russia originally pledged to cut output by almost 1.8 million barrels per day (bpd) only during the first half of the year. But OPEC has come under pressure to extend the cuts to cover all of 2017 in order to counter bulging supplies elsewhere.

"OPEC effectively said the production cut will be extended, meeting the reality of the restart of a big Libyan oil field and the continued expansion of U.S. shale oil," said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

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