Commodity Capsule: Oil prices rose sharply on Friday amid concerns of supply disruptions in the Middle East due to rising tensions in the Red Sea region.

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The US and Britain carried out strikes against Houthi military targets in Yemen in retaliation for attacks by Iran-backed groups on shipping in the Red Sea.

Brent crude futures hovered at $79 a barrel, while US WTI crude was trading past $73/bbl.

Crude oil benchmarks were on track for a second straight weekly rise.

US President Joe Biden said "targeted strikes" were a clear message that the United States and its partners will not tolerate attacks on its personnel or "allow hostile actors to imperil freedom of navigation".

President Biden confirmed support for the operation from Australia, Bahrain, Canada, and the Netherlands as well.

Houthi attacks in the Red Sea have disrupted international commerce on the route between Europe and Asia, which accounts for about 15% of the world's shipping traffic.

Since October, Houthis have attacked commercial vessels in the Red Sea to show support for Palestinian militant group Hamas in its fight against Israel.

Shipping giant Maersk said on Thursday it will divert all vessels away from the Red Sea for the foreseeable future, warning customers of further disruptions.

Iron ore futures slipped on Friday, as the persistently weak economic data in China dented demand prospects and hampered investor sentiment.

Prices of the key steelmaking ingredient were also on track for a weekly fall, despite a rebound on Thursday on stimulus hopes.

Iron ore contract on China's Dalian Commodity Exchange traded under 1,000 yuan a metric ton, ending the week with a 3.8 per cent decline.

Iron ore on the Singapore Exchange has shed nearly 4 per cent week-on-week so far.

Nonferrous metals rose on Friday, boosted by a softer dollar.

London Metal Exchange copper rose past $8,400 per metric ton.

The dollar index edged down as investors weighed higher-than-expected U.S. consumer price inflation against market bets that the Federal Reserve will cut rates as soon as March.

On a weekly basis, copper is down 0.7 per cent on the LME and down 0.4 per cent on the SHFE.

Gold prices rose on Friday, supported by a softer dollar and escalating Middle East conflict, but were set for 2nd weekly fall as traders reassessed hopes for early interest rate cuts in the United States.

Global gold inched towards $2,040 an ounce and shed 0.6 per cent so far in the week.

The dollar index fell under the 102 mark.

The United States and Britain launched strikes against sites linked to the Houthi movement in Yemen, while Saudi Arabia called for restraint in light of the strikes.

Data showed that US consumer prices rose more than expected in December, barring food and energy costs the pace of price increases fell to 3.9 per cent from 4 per cent on an annual basis, showing an ongoing moderation in underlying price pressures.

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