Crude oil strengthens to 81 in European session as the dollar weakens and market sentiment improves after European leaders have agreed on a plan to help Greece. Moreover, speculations for growth in emerging market demand also boost oil prices. A survey shows that OPEC will increase shipments, by +1.7%, in the month ending April 10 because demand from Asia is resilient.
Despite strong Asian consumption, the overall oil fundamentals remain weak. US, the world's largest oil consumer, reported huge increase in crude inventory. Although fuel demand rose modestly, it stayed below last years' level.
In March, front-month crude oil price has been trading within a new range of around 80 and 84. While volatility will be strong, it's not likely that price will break below the upper range unless the market sees sustainable recovery in US oil demand.
Natural gas storage surprisingly increased +11 bcf to 1626 bcf in the week ended March 19, +8% above 5-year average. The front-month contract for natural gas broke below 4 dollar to close at 3.981 Thursday. Price remains weak today. According to the US Energy Department, 'moderate demand' and 'strong domestic production' were reasons for recent price decline.
Precious metals are firm on Friday as the dollar retreats against the euro and other currencies. Gold soars for the second day and is currently trading at 1097. Price continues hovering below 1110. Silver rises to 16.8 and 16.5 seems to be a temporary support for price.
In PGMs, palladium rallies to 458.3, up +1.2%, in European session. Although price has dropped in tandem with others in the complex, palladium managed to close above 450. This suggests underlying strength in the metal. Platinum slides after rising +1.15% yesterday.