Commodity Research Report Ways2Capital 23 January 2017

Gold ended higher on Friday, buoyed by the weaker dollar as the inauguration of Donald Trump as U.S. president fueled uncertainty about the direction of fiscal and economic policy

Gold ended higher on Friday, buoyed by the weaker dollar as the inauguration of Donald Trump as U.S. president fueled uncertainty about the direction of fiscal and economic policy. Gold for February delivery settled up 0.67% at $1,209.5 on the Comex division of the New York Mercantile Exchange. The metal was 0.75% higher for the week, helped by a broad weakening of the U.S. dollar. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.33% to 100.77 late Friday. The index has fallen 1.49% so far this month amid worries over Trump's protectionist stance and following recent remarks in which he said the dollar was too strong. On Friday, Trump said his administration would put "America first" and also promised new roads, bridges and highways. But market sentiment was hit by the negative tone of the speech, which underlined uncertainty over how Trump will govern. Elsewhere in precious metals trading, silver was at $17.09 a troy ounce late Friday, and ended the week with gains of 1.59%.
Copper was trading at $2.61 a pound late Friday and ended the week down 2.35% as traders locked in profits after prices hit seven-week peaks. Platinum was up 2.66% on the day at $981.8 an ounce, trimming the week’s losses to 0.6%. In the week ahead, the economic calendar is light but Trump's policy plans in his first days in office are likely to dominate headlines. Investors will also be awaiting a first look at fourth quarter growth from the U.S. on Friday and from the U.K. a day earlier. Tuesday’s data on euro area private sector activity will also be closely watched. Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, January 23
Canada is to publish data on wholesale sales.
ECB President Mario Draghi is to speak at an event in Italy.

Tuesday, January 24
The euro zone is to release data on private sector business activity.
The U.K. High Court is to deliver a ruling regarding the government's ability to bypass parliament and initiate Britain’s exit from the European Union by triggering Article 50.
The U.K. is also to release data on public sector borrowing.
The U.S. is to report on existing home sales.

Wednesday, January 25
Australia is to publish data on inflation.
The Ifo Institute is to report on German business climate.

Thursday, January 26
New Zealand is to publish its monthly inflation report.
The U.K. is to release the preliminary reading on fourth quarter growth.
The U.S. is to release data on initial jobless claims and new home sales.

Friday, January 27
Shanghai stock exchange will be shut for a holiday.
The U.S. is to round up the week with a preliminary estimate of fourth quarter economic growth, as well as a report on durable goods orders and revised data on consumer sentiment.
Gold demand slowed in India this week as buyers postponed purchases on expectation of a cut in import duty and after a rebound in prices, while it was tepid across other major trading centres in Asia. In India, the world's second-largest consumer of the metal, dealers were charging a premium of up to $ 2 an ounce this week over official domestic prices that include a 10 percent import tax. The premiums were at $ 1 last week. "Buyers are anticipating a cut in import duty in the budget. That is prompting them to delay purchases. The Indian government will present on Feb. 1 its budget for the 2017/18 financial year starting on April 1. bullion industry has urged the government to cut the import duty to combat smuggling, which has increased since India raised the levy to 10 percent in August 2013 in a bid to narrow its current account deficit. A senior government official said earlier this month that the trade ministry has requested the finance ministry to cut the import duty to 6 percent. are also confused due to volatility in prices," said a Mumbai-based dealer with a private bank. "Investment demand has fallen substantially since the government banned higher-value currency notes." Gold MAUc1 was trading around 28,665 rupees per 10 grams on Friday. It fell to 26,862 rupees last month, the lowest level since Feb. 2, 2016. International gold prices were broadly steady on Friday, with spot gold XAU= on track for its fourth straight weekly gain, buoyed by a weaker dollar ahead of the inauguration of Donald Trump as U.S. President. In top consumer China, demand slowed on higher prices, a trader with a Chinese import bank said, causing premiums to shrink to $14 from $17 earlier this week. In Hong Kong and Singapore, premiums were quoted at around $1 - $1.30 an ounce, largely unchanged from last week. "Whenever prices go up over $1,190-$1,200, demand starts to slow down. Towards the Chinese New Year, the demand is usually sluggish and that's been the case this time," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. Prices in Tokyo were at a discount of 50 cents this week compared with a discount of $1 last week. "Industrial demand picked up ahead of the Chinese New Year. However, we have seen more buybacks from dealers due to higher prices in Japan," a Tokyo-based trader said.
Gold prices edged higher on Friday, re-approaching a recent two-month peak as caution surrounding Donald Trump’s future policies continued to boost demand for the safe-haven precious metal. On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were up 0.40% at $1,206.15, not far from Wednesday’s two-month high of $1,214.70.
The February contract ended Thursday’s session 0.87% lower at $ 1,201.50 an ounce. Futures were likely to find support at $1,195.80, Thursday’s low and resistance at $1,214.70. Gold prices initially dropped due to a stronger U.S. dollar late Thursday, after Fed Chair Janet Yellen said the central bank should continue to raise interest rates, but slowly. Speaking at a conference in San Francisco, Yellen said that "allowing the economy to run markedly and persistently ‘hot’ would be risky and unwise," before adding: "I consider it prudent to adjust the stance of monetary policy gradually over time."
The greenback also strengthened following the release of strong U.S. jobless claims and housing starts data, as well as an upbeat Philly Fed manufacturing activity report. A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies. But sentiment on the U.S. dollar became more vulnerable on Friday morning, ahead of Donald Trump’s inauguration ceremony amid sustained uncertainty over the new U.S. administration’s fiscal and economic policies. Demand for gold was also boosted by data on Friday showing that China’s gross domestic product rose 6.8% in the fourth quarter of 2016, in line with expectations. Year-on-year, China’s economy grew at a rate of 6.8%, slightly above expectations for a growth rate of 6.7%. China is the world’s biggest gold consumer. Elsewhere in metals trading, silver futures for March delivery were little changed, down only 0.02% at $16.998 a troy ounce, while copper futures for March delivery dropped 0.59% to $2.595 a pound. Gold hovers near 2-month highs as dollar weakens.
Gold prices fell sharply during European morning trade on Thursday, dropping below the $1,200-level after Federal Reserve Chair Janet Yellen said the U.S. economy is strong enough to warrant higher interest rates. Gold for February delivery on the Comex division of the New York Mercantile Exchange slumped $12.35, or around 1%, to $1,199.75 a troy ounce by 3:35AM ET, after sliding 80 cents, or less than 0.1%, a day earlier. With the U.S. economy close to full employment and inflation headed toward the Federal Reserve's 2% goal, it "makes sense" for the U.S. central bank to gradually lift interest rates, Fed Chair Janet Yellen said on Wednesday. The Fed chief said that she and other Fed policymakers expected the central bank to lift its key benchmark short-term rate "a few times a year" through 2019. That pace could change depending on how the outlook for the economy develops, Yellen cautioned. Yellen speaks again Thursday evening at 8:00PM ET on the economic outlook and monetary policy at Stanford University. The dollar index was at 101.20 early Thursday, pulling away from a near two-month low of 100.23 touched earlier this week. The Fed indicated last month that at least three rate increases were in the offing for 2017, according to a forecast of interest rates from members of the central bank, known as the dot-plot. However, traders remained unconvinced. Instead, markets are pricing in just two rate hikes during the course of this year, according to Investing.com’s Fed Rate Monitor Tool. Meanwhile, global financial markets will continue to focus on U.S. President-elect Donald Trump as he takes the Oath of Office and offers his inaugural address on Friday. Trump will be speaking at a pre-inauguration event later on Thursday.
Investors will welcome any detail he may give on his promises of tax reform, infrastructure spending and deregulation, as well as insight regarding policies on China and the domestic economy.
Trump has been credited with being a major catalyst behind the market's impressive rally since election day, although he has yet to outline his economic policies in detail. Also on the Comex, silver futures for March delivery sank 33.0 cents, or about 1.9%, at $16.94 a troy ounce during morning hours in London. Meanwhile, platinum fell 0.9% to $963.25, while palladium dipped 0.1% to $750.48 an ounce. Elsewhere in metals trading, copper futures eased up 0.4 cents, or about 0.1%, to $2.620 a pound.
Gold prices climbed to the highest level in around eight weeks on Tuesday, as investors looked ahead to a highly-anticipated speech by British Prime Minister Theresa May later in the day, at which she is expected to outline her plans for a 'Hard Brexit'. Gold for February delivery on the Comex division of the New York Mercantile Exchange touched a session peak of $ 1,212.50 a troy ounce, a level not seen since November 23. It was last at $ 1,210.85 by 3:00AM ET , up almost $15.00, or 1.2%. Markets in the U.S. were closed Monday for a public holiday. Britain will not seek a Brexit deal that leaves it "half in, half out" of the European Union, Prime Minister Theresa May will say on Tuesday, according to her office, in a speech setting out her 12 priorities for upcoming divorce talks with the bloc. Those priorities will include leaving the European Union's single market and regaining full control of Britain's borders, several newspapers reported, reinforcing investor fears of a 'Hard Brexit'.
May has previously stated she will trigger Article 50, which starts the formal withdrawal process from the European Union, by the end of March, but so far has given few details about what deal she will be seeking. She is due to set out more detail on her plans on Tuesday in a speech at around 11:45GMT to an audience including foreign diplomats and Britain's own Brexit negotiating team. Meanwhile, global financial markets will continue to focus on U.S. President-Elect Donald Trump as he takes the Oath of Office and offers his inaugural address on Friday. Investors will welcome any detail he may give on his promises of tax reform, infrastructure spending and deregulation, as well as insight regarding policies on China and the domestic economy. President-elect Trump has been credited with being a major catalyst behind the market's impressive rally since election day, although he has yet to outline his economic policies in detail. Markets were disappointed last week after Trump failed to offer details on his promises to boost fiscal spending and cut taxes at a highly-anticipated news conference.
The precious metal has been well-supported in recent days, climbing for seven sessions in a row, amid uncertainty surrounding the Federal Reserve’s pace of interest rate hikes this year. The Fed had indicated in December that at least three rate increases were in the offing for 2017, according to a forecast of interest rates from members of the central bank, known as the dot-plot. However, traders remained unconvinced. Instead, markets are pricing in just two rate hikes during the course of this year, according to Investing.com’s Fed Rate Monitor Tool. A delay in raising interest rates would be seen as positive for gold, a non-interest-bearing asset, and negative for the dollar. Also on the Comex, silver futures for March delivery was up 21.2 cents, or nearly 1.3%, at $ 16.98 a troy ounce during morning hours in London. Meanwhile, platinum tacked on 0.55% to $991.80, while palladium dipped 0.2% to $ 747.65 an ounce. Elsewhere in metals trading, copper futures dropped 5.7 cents, or 2.1%, to $2.633 a pound.
Gold prices started the week higher on Monday, rallying to the strongest level in around two months as investors looked ahead to a highly-anticipated speech by British Prime Minister Theresa May and U.S. President-elect Donald Trump's inauguration later this week. Gold for February delivery on the Comex division of the New York Mercantile Exchange touched a session peak of $1,208.70 a troy ounce, a level not seen since November 23. It was last at $1,202.95 by 3:10AM ET (08:10GMT), up almost $7.00, or 0.6%. The British pound tumbled more than 1% against the dollar to a three-month low following media reports that suggested Prime Minister Theresa May's government was prepared to make a "clean and hard" exit from the European Union, ahead of her speech Tuesday. A report in The Sunday Times newspaper said that May was willing to quit the European Union's single market in order to regain control of Britain's borders. May has previously stated she will trigger Article 50, which starts the formal withdrawal process from the European Union, by the end of March, but so far has given few details about what deal she will be seeking. Meanwhile, global financial markets will continue to focus on U.S. President-Elect Donald Trump as he takes the Oath of Office and offers his inaugural address on Friday. Investors will welcome any detail he may give on his promises of tax reform, infrastructure spending and deregulation, as well as insight regarding policies on China and the domestic economy. President-elect Trump has been credited with being a major catalyst behind the impressive rally in U.S. shares and the dollar since election day, although he has yet to outline his economic policies in detail. Markets were disappointed last week after Trump failed to offer details on his promises to boost fiscal spending and cut taxes at a highly-anticipated news conference. The precious metal has been well-supported in recent sessions amid uncertainty surrounding the Federal Reserve’s pace of interest rate hikes this year. The Fed had indicated in December that at least three rate increases were in the offing for 2017, according to a forecast of interest rates from members of the central bank, known as the dot-plot. However, traders remained unconvinced. Instead, markets are pricing in just two rate hikes during the course of this year, according to Investing.com’s Fed Rate Monitor Tool. A delay in raising interest rates would be seen as positive for gold, a non-interest-bearing asset, and negative for the dollar. Also on the Comex, silver futures for March delivery was up 8.3 cents, or 0.5%, at $16.84 a troy ounce during morning hours in London. Meanwhile, platinum tacked on 0.1% to $986.40, while palladium advanced 0.4% to $751.75 an ounce.

Gold ended lower on Friday as investors took profits after prices hit a seven-week peak in the previous session, but still notched up a third consecutive weekly gain.
Gold for February delivery settled down 0.21% at $1,195.3 on the Comex division of the New York Mercantile Exchange. The metal was still 1.98% higher for the week, helped by a broad weakening of the U.S. dollar. The U.S. dollar index posted its largest weekly decline since late October, shedding 1.0% as optimism cooled over President-elect Donald Trump’s economic policy proposals.
The drop in the dollar came after Trump disappointed traders who had been hoping he would address economic and fiscal policies in his first formal news conference as U.S. president-elect.
The dollar had rallied to 14-year peaks earlier this month on expectations that Trump's policies would spur growth and inflation and prompt the Federal Reserve to raise interest rates more quickly.
Trump will officially take office on January 20. Elsewhere in precious metals trading, silver was at $16.83 a troy ounce late Friday, and ended the week with gains of 1.69%. Copper was up 1.29% at $2.70 a pound and ended the week up 6.62% on hopes for increased demand from top consumer China. Platinum was up 0.31% on the day at $987.75 an ounce and was up 1.53% for the week.
In the week ahead, financial markets will continue to focus on U.S. President-elect Trump ahead of his inauguration on Friday. Investors will be looking ahead to Thursday’ policy announcement by the European Central bank and Chinese data on fourth quarter growth, due for release on Friday.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, January 16
U.S. financial markets will be closed for Martin Luther King Day.
Bank of England Governor Mark Carney is due to speak at an event in London.

Tuesday, January 17
New Zealand is to release private sector data on business confidence.
The U.K. is to release data on inflation.
The ZEW Institute is to report on German economic sentiment.
New York Fed President William Dudley is to speak at an event in New York and the U.S. is also to release the Empire state manufacturing index.
U.K. Prime Minister Theresa May is due to speak about starting proceedings for Britain’s exit from the European Union.

Wednesday, January 18
The U.K. is to publish its monthly jobs report.
The euro zone is to release revised data on inflation.
The U.S. is to publish figures on inflation and industrial production. Later in the day, Fed Chair Janet Yellen is to speak at an event in San Francisco.
The Bank of Canada is to announce its latest monetary policy decision and hold a press conference to discuss the economic outlook.

Thursday, January 19
Australia is to publish its monthly employment report.
The ECB is to announce its latest monetary policy decision. The announcement is to be followed by a press conference with President Mario Draghi.
Canada is to report on manufacturing sales and foreign securities purchases.
The U.S. is to release a series of reports, including data on building permits, housing starts, initial jobless claims and manufacturing activity in the Philadelphia region.
Fed Chair Janet Yellen is to speak at an event in Stanford.

Friday, January 20
China is to release data on fourth quarter growth as well as figures on industrial production.
The U.K. is to release data on retail sales.
Canada is to round up the week with data on retail sales.

? ENERGY
Oil ticked lower on Monday, falling for the first time in three sessions as prospects of rising U.S. production weighed on the market. U.S. energy companies last week added the most rigs drilling for new production in almost four years. Drillers added 29 rigs in the week to Jan. 20, bringing the total count up to 551, the most since November 2015, energy services firm Baker Hughes BHI.N said on Friday. oil production has risen more than 6 percent since mid-2016, although it remains 7 percent below a historic high in 2015. It is back to levels of late 2014, when strong U.S. crude output contributed to a crash in oil prices. Brent crude LCOc1 , the international benchmark for oil prices, was trading at $55.42 per barrel at 0441 GMT, down 7 cents from its last close. U.S. West Texas Intermediate crude futures CLc1 fell 11 cents to $53.11 a barrel. Crude oil had traded higher earlier in the session on the back of output cuts by OPEC and other producers. Production cuts by oil producers and a weaker dollar prevented the market from dropping further. OPEC and non-OPEC countries have made a strong start to lowering their oil output under the first such pact in more than a decade, energy ministers said on Sunday as producers look to reduce oversupply and support prices. said 1.5 million of almost 1.8 million barrels per day had already been taken out of the market. "Oil is trading in a range," said Jeffrey Halley, senior market analyst at OANDA brokerage in Singapore. "In the medium term it is going to be tough for oil to break out. The more oil goes up, the more these shale drillers are going to hedge by the futures." On the technical front, Brent may climb up to $56.55 per barrel, as it has cleared resistance at $55.43, according to Wang Tao, Reuters analyst for commodities and energy technicals. funds rushed to place bullish wagers on U.S. crude oil last week, data showed on Friday. The U.S. dollar fell against the euro and yen on Tuesday after a drop in oil prices suggested U.S. inflation would stay low and prevent the Federal Reserve from hiking interest rates at a steady pace this year. Risk aversion also boosted the euro and yen. A weaker dollar makes greenback-priced commodities cheaper for importer holding other currencies.
Oil prices edged up on Monday, supported by statements from oil producers over the weekend that an output cut was being successfully implemented, but markets were held back by a surge in drilling that suggested U.S. production would rise further.
Brent crude futures LCOc1 , the international benchmark for oil prices, were trading at $55.57 per barrel at 0016 GMT, up 8 cents from their last close.
U.S. West Texas Intermediate crude futures were up 8 cents at $53.30 a barrel.
"Oil rallied strongly as oil producers met to discuss the adherence to the production cut agreement. Saudi Arabian Energy Minister Khalid al-Falih said that producers have cut 1.5 million barrel per day so far in 2017," ANZ bank said on Monday. "Prices reversed these gains after data showed another pickup in drilling activity," it added. U.S. energy companies last week added the most rigs drilling for new production in almost four years. Drillers added 29 rigs in the week to Jan. 20, bringing the total count up to 551, the most since November 2015, energy services firm Baker Hughes BHI.N said on Friday. oil production levels have risen over 6 percent since mid-2016, and although they remain 7 percent below their historic 2015 peak, they are back to levels of late 2014, when high U.S. crude output contributed to a crash in oil prices.
Oil futures finished higher on Friday, logging a modest weekly gain with traders encouraged by signs that global supply is tightening in wake of a planned agreement by major crude producers to cut output. On the ICE Futures Exchange in London, Brent oil for March delivery rallied $1.33, or about 2.5%, to settle at $55.45 a barrel by close of trade Friday. London-traded Brent futures scored a gain of 4 cents, or approximately 0.1%, on the week. Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in March jumped $1.10, or around 2.1%, to end at $53.22 a barrel by close of trade. For the week, New York-traded oil futures rose 5 cents, or nearly 0.1%. Oil jumped on Friday after Saudi Arabia’s Energy Minister Khalid al-Falih, speaking at the World Economic Forum in Davos, said that 1.5 million barrels a day of the roughly 1.8 million in cuts pledged by OPEC and non-OPEC countries have already been taken out of the market. The upbeat comments added to signs that the oil market is rebalancing. Prices, however, finished off the session's highs after data showed a sharp weekly rise in the number of active U.S. rigs drilling for oil. According to oilfield services provider Baker Hughes, the number of rigs drilling for oil in the U.S. jumped by 29 last week to 551, the largest weekly increase since a recovery in the rig count began in June and the highest level in around 14 months. The data raised concerns that the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand. In a monthly report issued this week, the International Energy Agency said OPEC production has slowed, declining by 320,000 barrels a day to 33.09 million barrels in December. January 1 marked the official start of the deal agreed by OPEC and non-OPEC member countries such as Russia in November last year to reduce output by almost 1.8 million barrels per day to 32.5 million for the next six months. The deal, if carried out as planned, should reduce global supply by about 2%. Some traders remain skeptical that the planned cuts will be as substantial as the market currently expects. While some major oil producers, such as Saudi Arabia and Kuwait, have so far showed signs that they are sticking to their pledge to cut back output, others, such as Libya and Iraq have ramped up production. A monitoring committee charged with tracking adherence to the global deal is due to meet in Vienna for the first time on January 22. Elsewhere on Nymex, gasoline futures for February rose 3.1 cents, or about 2.1% to $1.566 a gallon. It ended down about 2.9% for the week. February heating oil tacked on 2.7 cents, or 1.7%, to finish at $1.645 a gallon. For the week, the fuel declined around 0.3%. Natural gas futures for February delivery sank 16.4 cents, or nearly 4.9%, to $3.204 per million British thermal units. It posted a weekly loss of more than 6% on forecasts for warmer winter weather. In the week ahead, market participants will eye fresh weekly information on U.S. stockpiles of crude and refined products on Tuesday and Wednesday to gauge the strength of demand in the world’s largest oil consumer.
Traders will also continue to pay close attention to comments from global oil producers for further evidence that they are complying with their agreement to reduce output this year. Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Tuesday, January 24
The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.

Wednesday, January 25
The U.S. Energy Information Administration is to release weekly data on oil and gasoline stockpiles.

Thursday, January 26
The U.S. EIA is to produce a weekly report on natural gas supplies in storage.

Friday, January 27
Baker Hughes will release weekly data on the U.S. oil rig count.

Oil prices rose more than 2 percent on Friday on expectations that this weekend's meeting of the world's top oil producers would demonstrate compliance to a global output cut deal, but rising U.S. drilling activity limited gains. Members of the Organization of the Petroleum Exporting Countries and some other producing countries including Russia will meet in Vienna this weekend to establish a mechanism to verify compliance with a deal to cut 1.8 million barrels per day (bpd) of output, OPEC's secretary general told Reuters. Arabia's energy minister said 1.5 million bpd had already been taken out of the market. "The petroleum markets are moving higher in Friday trade on the latest round of positive talk about how much supply oil producers have taken offline ahead of Sunday's review by OPEC and non-OPEC representatives in Vienna," Tim Evans, Citi Futures' energy futures specialist, said in a note. Brent crude LCOc1 ended the session up $1.33, or 2.5 percent, at $55.49 a barrel. U.S. crude for February delivery CLc1 closed up by $1.05, or 2 percent, at $52.42 a barrel before expiring. The more active March contract settled up 2.1 percent at $ 53.22. For the week, both contracts were largely unchanged. Prices pared gains after data from energy services firm Baker Hughes showed U.S. drilling companies this week added the most oil rigs in nearly four years. Swelling oil stockpiles in the U.S. and rising shale production could threaten market rebalancing, analysts said."For a lasting balance to be restored on the oil market and the very high stocks reduced, the agreement will need to be strictly implemented over a considerable period of time," Commerzbank said in a note. "This is particularly true given that U.S. oil production is rising again and given that the oil supply from Libya and Nigeria may be expanded." U.S. crude inventories USOILC=ECI unexpectedly soared 2.3 million barrels last week as refineries sharply slowed production, while gasoline builds were much larger than expected amid weak demand, the Energy Information Administration said on Thursday. funds rushed to place bullish wagers on U.S. crude oil in the week to Jan. 17, boosting their net long positions to the highest levels since July 2014, data from the U.S. Commodity Futures Trading Commission showed. long positions in NYMEX futures and options 3067651MLNG among speculators soared to the highest on record, based on publicly available data going back to 2006. Libya's National Oil Corporation , meanwhile, said production had now climbed to 722,000 bpd, resuming its rise after poor weather had caused a small dip. Schieldrop, chief commodities analyst at SEB Markets, said Brent crude was starting to move into a trading range around $55 as the production cut deal placed a floor price of $50, while U.S. shale oil producers capped the upside at $60.
Oil rose Friday as Chinese GDP growth beat expectations, with the latest U.S. rig count data on tap. Brent crude was up 75 cents, or 1.38%, at $54.91 at 07:45 ET. U.S. crude gained 65 cents, or 1.25%, to $ 52.77. China's fourth quarter GDP growth came in at 6.8% compared with a forecast of 6.7% boosting expectations of healthy demand for oil. Official U.S. crude inventories unexpectedly rose in the latest week when they were forecast to fall. OPEC and non-OPEC producers have agreed to cut output by some 1.8 million barrels a day in the first half of this year. The International Energy Agency Thursday said it sees the market tightening in the wake of the cuts.
But it warned that higher prices could encourage increased activity by U.S. shale producers. Baker Hughes rig count data are due out later in the session.

U.S. liquefied natural gas exporters are sending tankers to Asia to fill a gap in the region's demand as markets have tightened more-than-expected on surging consumption in China and Pakistan, and because of Australia's struggles to ramp up production.
Benefiting from the Panama Canal expansion last year that allows bigger ships to cross from the Gulf of Mexico into the Pacific, around a dozen LNG cargoes from the United States have gone to Asia since December. Data in Thomson Reuters Eikon currently shows two LNG tankers, carrying a combined 280,000 cubic metres of gas, are currently crossing to Asia from Louisiana. U.S. LNG exports are coming from Cheniere Energy's LNG.A Sabine Pass, Louisiana, facility that opened last year as the first U.S. export terminal outside Alaska. They included the first-ever U.S. shale gas going to South Korea, which arrived this month and was bought by South Korea's private gas company SK E&S Co. spot natural gas GT-HH-IDX costs just $3.21 per million British thermal units, while Asian spot LNG prices LNG-AS have soared over 80 percent since June last year to almost $ 10 per mmBtu. "This run up in prices definitely took everyone by surprise. In mid-2016, I don't think anyone expected LNG prices to double to reach $10 per mmBtu," "Cheniere definitely did well (out of filling the supply gap), as they have been selling on a spot basis." Shipping brokerage Arctic Securities said this week that this Asian LNG premium meant "LNG traders (are) netting $1 million plus per U.S.-Asia cargo."
Along with Cheniere, Royal Dutch Shell RDSa.L , and Spain's Gas Natural Fenosa GAS.MC have been active exporters from Louisiana to Asia. "LNG exports out of U.S. to Asia... is clearly an attractive deal which is benefiting the likes of Cheniere Marketing, and Shell/GNF, who own volumes at the first two trains," Arctic Securities said.

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