Oil Pumpjacks in California, US
Crude oil futures correct as traders stunt Opec-inspired rally Reuters

Oil futures headed lower on Friday (7 October), bringing to an end four consecutive sessions of intraday gains, as City sources suggested traders went in to cash out recent gains with the weekend in sight.

At 3.20pm BST, the Brent front-month futures contract was down 0.32% or 17 cents at $52.34 per barrel, while the West Texas Intermediate 0.38% or 19 cents at $50.25 per barrel, with the latter benchmark maintaining its $50-plus barrel, a mark it attained in US trading overnight.

Market commentators, while acknowledging the recent rally, continue to remain sceptical in the face of lacklustre demand and deep-seated doubts about how Opec, which agreed to limit its production to a range of 32.5 million to 33 million barrels per day (bpd) on 28 September, would implement the cut on its members.

The cartel is expected to reveal further details on 30 November at its next meeting in Vienna, Austria. Matt Stanley, commodities broker at Freight Investor Services, said only Wall Street had bought into the recent rally.

"We are going to get to $55 before long whether we like it or not. US shale players are obviously taking this opportunity to lock in as much as they can as quickly as they can. Who can blame them? Game on indeed.

"Meanwhile, Opec continues to produce at a record pace. Demand isn't picking up [or if it is can somebody please show me where] and Europe is most certainly coughing economically. Hope is a wonderful thing, but it's not a good strategy to make money against."

Elsewhere in the commodities market, precious metals mounted a gradual recovery led by gold. At 3.53pm BST, Comex gold futures contract for December delivery was up 0.44% or $5.50 to $1,258.50 an ounce, with the US non-farm payroll data failing to fire up dollar strength posting a headline reading of 156,000 jobs being created in the US in September.

FXTM's vice president of market research Jameel Ahmad said market expectations of US interest rate hikes, deemed negative for gold, will decline slightly following the weak jobs headline number.

"However, the data suggests that wage growth is accelerating and this can create further dissent within the US Federal Reserve and sway other policymakers towards voting for an interest rate rise over the upcoming months."