MUMBAI: The strengthening of the euro against the dollar and the rally in equities continued to bolster investor sentiments.
A booster dose came from the International Monetary Fund (IMF) when it painted a rosy picture about the global GDP growth in 2010.
The combined effect saw commodity counters powering their way out of the recent sluggishness.
The euro strengthened against the dollar, following the cautious statement from European Central Bank (ECB) President Jean-Claude Trichet on the region’s economy after the bank held interest rates at a record low 1%.
NYMEX crude oil futures are heading for a 5% weekly gain after government statistics showed robust demand growth and falling inventories, while positive economic indicators lifted sentiments across markets.
West Texas Intermediate crude (WTI) rose 44 cents to $75.88 a barrel on the New York Mercantile Exchange (NYMEX), after touching an intraday peak of $76 on Thursday, the highest price this month.
Front-month WTI was still well below a 19-month peak above $87 reached in early May, although it has rebounded sharply from a trough below $65 on May 20.
Crude inventories fell 5 million barrels last week, more than twice as much as expected, the Energy Information Administration (EIA) said on Thursday.
The nation’s demand for distillate fuels, including heating oil and diesel, soared 30% in the past four weeks from a year earlier, according to the EIA, while gasoline consumption climbed 2.4% in the same period.
Gasoline inventories unexpectedly rose by 1.32 million barrels last week, the EIA data showed, tempering price gains. But distillate stocks rose a smaller-than-expected 321,000 barrels.
The International Monetary Fund (IMF) raised its 2010 global growth forecast on Thursday, citing an expansion in Asia and private sector demand in the US. The IMF raised its 2010 global output growth forecast to 4.6% from 4.2% after a fall of 0.6% in 2009.
The IMF said a double-dip recession was unlikely, which helped boost the outlook for oil demand.
Oil inventories at the key US Cushing, Oklahoma, crude oil hub fell more than 350,000 barrels in the week to July 6 to 38.9 million barrels, figures from energy industry data provider Genscape showed on Thursday.
Gold edged up this morning supported by a strong euro. However, the stock market rally is seen prompting some investors to dump bullion and shift money into riskier assets.
Spot gold added $1.20 to $1,197.40 an ounce. It reached a high of around $1,207 an ounce on Thursday on steady physical buying in Asia before losing much of the gain as risk appetite grew.
The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings slipped to 1,316.04 tonnes by July 8 from 1,316.48 on July 6. The holdings hit a record at 1,320.44 tonnes on June 29.
Risk appetite increased after weekly first-time US jobless claims dropped to their lowest in two months, offering a ray of hope for economic recovery.
London copper extended gains on Friday after touching one-week highs in the previous session as another rally in global stocks and the euro’s rise continued to fuel risk appetite.
Three-month copper on the London Metal Exchange (LME) rose $40 to $6,710 a tonne.
Aiding gains were data showing falling new claims for jobless benefits last week to their lowest level in two months, offering cautious hope for an economic recovery that had shown signs of fatigue.
Investors are eyeing copper imports figures due to be out this weekend, with analysts and traders saying imports probably rose in June for the first time in three months due to improved margins.
Top consumers have increased booking of spot copper imports since May as the arbitrage has mostly stayed open for buying from the LME and selling to Shanghai.
Most of the domestic commodity counters are trading strong following the global markets. With the rupee adding to the strength, select commodity counters came under pressure.
MCX crude oil futures for July added nearly 0.4% to trade at Rs 3,555 per barrel after spending the session between Rs 3,560 and Rs 3,546.
Precious metals counters were softened by soft trading interest. MCX Gold contract for August settlement retraced lower. The contract was last quoting at Rs 18,288 after having spent the session between Rs 18,320 and Rs 18,282 per 10 grams.
MCX Silver September settlement contract was trading marginally lower at Rs 28,695 per kg, after having opened the day at Rs 28,770.
Base metal counters were trading mix. MCX copper for August settlement was quoting 0.7% strong at Rs 315.60 per kg. MCX zinc July contract lost 0.2% to trade at Rs 86.60 per kg.
