World oil prices rallied this week, supported by a drop in US stockpiles, while traders on the metals markets took their lead from movements in the dollar and Chinese data.
OIL: Crude futures rallied as data showed a much bigger than expected drop in US crude inventories, while OPEC said demand would pick up.
Oil prices had surged more than two dollars Tuesday on expectations that the US inventory data would reveal a drop,
The Department of Energy indeed said that commercial stockpiles of US crude slumped by 6.8 million barrels last week to 470.6 million. Analysts' consensus forecast had been for a drop of 1.45 million, according to Bloomberg.
A drop in US stockpiles is seen as an indicator of healthy demand in the world's top crude consumer, supporting global prices.
OPEC meanwhile stuck to its forecast that oil demand will pick up this year but warned that over-supply may still keep a "ceiling" on crude prices, even as it kept on increasing its own output to a two-year high.
The Organisation of the Petroleum Exporting Countries stuck to its prediction of total oil demand in 2015 of 92.5 million barrels per day, up 1.18 mbpd from 2014.
Consumption is expected to pick up pace in the second half in line with a global economic rebound, the 12-country cartel said in its June monthly report.
OPEC, which has traditionally sought to defend price levels by cutting output if needed, dramatically switched strategy last November when it opted to leave its production target unchanged.
At its bi-annual production earlier this month, OPEC stuck to this strategy, keeping its output target unchanged at 30 million barrels per day.
This is seen as an attempt to maintain market share and put pressure on US shale oil producers, which need a higher oil price to be profitable than in traditional extraction methods -- a strategy that experts say has had some success.
Oil prices meanwhile fell at the end of the week as the International Energy Agency predicted that a recent surge in world crude demand was set to end.
World oil demand growth soared to a four-year high in the first three months of 2015, but the surge is unlikely to persist, the IEA said yesterday in its monthly report.
The strong growth, which reached 1.7 million barrels per day in the first quarter, was underpinned by an economic recovery, a European winter that was colder than the previous year's, and lower crude prices which spurred consumption.
"However, there are doubts that this trio will persist" in the second half of 2015, said the IEA.
