Oil-futures prices on the New York Mercantile Exchange rebounded Friday on short-covering after touching a more than 12-year low the previous day. Light, sweet crude futures on Nymex for delivery in March CLH6, +4.81% traded at $27.48 a barrel, up $1.27, or 4.9%, in the Globex electronic session. April Brent crude LCOJ6, +4.92% on London's ICE Futures exchange rose $1.46, or 4.9%, to $31.52 a barrel. Prices touched a low of $26.05 a barrel a day ago, the lowest settlement since May 6, 2003, as the market largely ignored a drop in weekly U.S. crude-oil inventories. A supply glut has dragged prices down over the past two years. The plunge in prices got some respite when traders moved in to cover their short positions. Late Thursday, The Wall Street Journal reported that the United Arab Emirates energy minister said current prices have forced non-Organization of the Petroleum Exporting Countries producers to at least cap output increases. Market sentiment firmed up after the U.A.E. energy minister said OPEC was ready to cooperate on production cuts, though few believe such an outcome would materialize. "We view this as further jawboning, with the likelihood of a coordinated response on supply cuts very low," according to an ANZ Bank report. The International Energy Agency and the U.S. Energy Information Administration said this week they expect the oversupply to persist for months, keeping prices low. "We do believe that Brent and [West Texas Intermediate] prices will rebound in the second half of 2016 as more aggressive cutbacks in production are forthcoming, particularly in the U.S.," said John Davies, head of commodities research at BMI Research. The firmer sentiment in crude oil put the spotlight on the recent price divergence in gold, which fell after touching a one-year high the previous day. Spot gold GCJ6, -0.48% was trading at $1,239.10 a troy ounce, down from the previous close of $1,246.57 a troy ounce. It briefly pushed above $1,260 a troy ounce a day ago on rising demand for safe-haven assets that has made it the standout commodity this year. Industrial metals also found some support on short covering, with nickel leading the gains. Three-month nickel futures on the London Metal Exchange rose 1.4% to $7,705 a metric ton Friday, after mirroring oil's plunge to a 12-year low the previous day. Copper prices rose 0.7% to $4,478 a ton, while aluminum futures were up 0.6% at $1,493.50 a ton. The respite in falling metal prices may prove to be temporary, analysts said, until more evidence of production cuts by producers including in China filters through to markets.
