(CEP News) - Commodities are rallying on Friday, with crude oil rebounding after dropping below $70 per barrel on Thursday.West Texas Intermediate (WTI) crude oil is up $1.79 per barrel to $71.64 on rumours that the Organization of the Petroleum Exporting Countries (OPEC) will cut production at a meeting scheduled for next Friday. The meeting was rescheduled yesterday from Nov. 18.
Gayle Berry from Barclays Capital commented on how WTI's $69.85 close on Thursday was its lowest since August 2007.
"Early trading this morning has seen something of a recovery though," she wrote. "It appears increasingly likely that OPEC will cut production at the gathering, in order to attempt to bring some [stabilization] to prices, with the market looking to OPEC to cut by 1.5mb/d, perhaps 1mb/d this month and 0.5mb/d later."
Meanwhile, Phil Flynn from Alaron Energies foresees a potential return to $75 per barrel.
"Day traders and swing traders should look to sell the 74 area and look to buy low seventies with major support at 67," he wrote in his daily Energy Report to clients. "Some of us might want to add on to long term shorts on a rebound to that area of 74 plus. If you have pyramid short energy positions and you want to play for an extreme low 50 dollars a barrel, you may want to take some of your open profits and buy some calls on breaks to protect from the just in case scenario."
Meanwhile, Intercontinental Exchange (ICE) RBOB gasoline futures are up 3.81 cents per gallon to 166.01 cents. Heating oil at the ICE is down 10.62 cents per gallon to 211.08 cents per gallon.
In the mining sector, Chicago Board of Trade (CBOT) gold is trading down $26.40 per ounce to $779.50 USD. In Canadian dollars, gold is down $25.36 to C$923.05. Silver contracts at the CBOT are down $0.54 per ounce to $9.15. Bloomberg's index for base metals is up 2.73 points to 154.59.
"Precious metals have continued to decline, suggesting that the recent flight to quality trade may be reversing itself for now, leaving gold vulnerable to a test of $750./oz and silver continuing to trade below $10.00/oz," wrote CMC Markets analyst Colin Cieszynski.
Wheat futures at the CBOT are up $6.00 per one hundred bushels to $561.25.
All data taken at 11:00 a.m. EDT.
By Ryan Szporer, rszporer@economicnews.ca, edited by Sarah Sussman, ssussman@economicnews.ca
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