Global oil prices rose in European trade on Friday on track for the second straight session, with US crude scaling four-month highs, and on track for the third weekly profit in a month on speculation about new OPEC+ production cuts.

Prices are also boosted by hopes of improving Chinese demand on fuel following positive manufacturing and services data in February. 

Global Oil Prices

US crude rose 1.9% to $79.76 a barrel, the highest since November 7, while Brent added 1.7% to $83.36 a barrel. 

US crude lost 0.1% on Thursday, while Brent climbed 0.2% on improving risk appetite on higher-yield assets. 

Oil prices were up 2.5% on average in February, the second monthly profit in a row as the OPEC+ alliance pledges to support the market, and amid ongoing concerns about supply disruptions in the Red Sea.  

As for this week, prices are up 3% so far on track for the third weekly profit in a month.

OPEC+ 

OPEC+ is expected to extend current production cuts into the second half of the year to support prices and sap supplies.

A Bloomberg survey expects OPEC+ to extend current production cuts for a new duration, and force output limitations of upwards of 2 million bpd. 

Chinese Demand

Chinese data showed the manufacturinng PMI hit 50.9 in February, beating estimates of 50.7. 

 China’s services PMI rose 51.4 in February, the best since September, and beating estimates of 50.9. 

Silver prices fell in European trade on Friday, resuming losses and approaching two-week lows, while on track for the second weekly loss in a row on weak investment demand.

Traders are now preferring higher-yield asserts, especially US treasury bonds and bitcoin exchange funds.

Silver Prices Today 

Silver prices fell 0.75% to $22.51 an ounce, with a session-high at $22.79, after closing up 1% on Thursday, away from two-week lows at $22.28. 

Weekly Trades

Silver prices are down 2.0% so far this week on track for the second weekly loss in a row.

Weak Investment Demand 

As the odds of early Fed rate cuts this year fade, the yields on US 10-year treasury bonds surged to three-month highs.

Demand is also strengthening on Bitcoin exchange funds after official US approval in January, attracting massive liquidity in the past two weeks. 

Such developments are pressuring non-yielding assets, including gold and silver, in favor of better, more competitive assets now. 

Euro rose in European trade on Friday against a basket of major rivals, holding above one-week lows against the dollar and heading for the first profit in four days, as investors await European inflation data for February. 

The data will provide fresh pricing for the future of ECB interest rate cuts, which could start in May. 

EUR/USD

EUR/USD rose 0.2% to 1.0822, with a session-low at 1.0722, after losing 0.3% on Thursday, the third loss in a row, plumbing a week low at 1.0796 following German consumer prices data, which missed estimates. 

 Euro fell 0.15% in February, the second monthly loss in a row as the odds of early US rate cuts faded.

European Rates 

Also the odds of an early 0.25% ECB interest rate cut in April faded following bullish remarks by European Central Bank officials. 

The markets are now betting on the first European rate cut occurring in May or June.

According to the ECB’s last meeting minutes, policymakers believe it’s still too early to talk about rate cuts despite signs of slower inflation in the eurozone. 

ECB President Christine Lagarde said this week that wages growth remains strong, which will continue to prop up prices. 

Inflation Data

Now investors await consumer prices data for the whole eurozone in February to gauge the likely path ahead for ECB interest rates. 

Eurozone’s consumer prices are expected up 2.5% in February, decelerating from 2.8% in January.  

Dollar rose against most major rivals on Thursday following US inflation data, which could have an impact on Fed monetary policies. 

The data released earlier today showed US personal spending rose 0.3% in January m/m, and 2.4% y/y, slowing down slightly from December.

Core spending rose 0.4% m/m in January, and 2.8% y/y, also slowing from December. 

Such data showed that inflation is ever so slightly losing steam in accordance with Fed’s plans. 

On the other hand, US labor data showed unemployment claims rose 13 thousand to 215 thousand in the week ending February 24. 

Following the collective data, US two-year treasury yields fell by 3 basis points to 4.619%, while 10-year yields fell by 4 basis points to 4.232%. 

The dollar index rose 0.1% as of 21:28 GMT to 104.1, with a session-high at 104.2, and a low at 103.6. 

Loonie 

The Canadian dollar stabilized at 0.7364 as of 21:43 GMT.

Earlier government data showed Canada’s GDPgrowth  flat in December, while analysts expected a 0.2% growth rate. 

Aussie

The Australian dollar stabilized at 0.6499 against its US counterpart as of 21:43 GMT.