Brent oil fell for a second day on Friday, paring a weekly gain, as a cease-fire between Israel and Hamas eased concern that tension in the Middle East will disrupt the region’s crude supplies. Crude prices fell because of profit taking after the truce was announced as the tension in the Middle East eased, WTI for January delivery was at $87.16 a barrel, down 22 cents from the November 21 close.
The contract has gained 0.6 percent this week and dropped 12 percent this year. Hamas and Israel are seeking to solidify the cease-fire which took effect November 21 and was announced by Egyptian Foreign Minister Mohamed Amr and U.S. Secretary of State Hillary Clinton. The conflict threatens further instability in the Middle East and North Africa after a wave of uprisings that started last year, including one that almost entirely halted crude exports from Libya.
Gold is poised for a weekly advance after investors boosted holdings to an all-time high and central banks added to reserves as Europe’s debt crisis persisted. Palladium headed for the best week in more than two months. Spot gold traded at $1,729.13 an ounce, compared to $1,729.55 yesterday. The metal, poised for a 12th annual gain, is 0.9 percent higher this week. Holdings in bullion-backed exchange-traded products rose to 2,605.318 metric tons on November 21, Kazakhstan, Turkey and Russia boosted reserves in October, joining Brazil, which raised holdings to the highest in more than 11 years.
European Union leaders are unlikely to reach a budget deal at the end of a summit this week, German Chancellor Angela Merkel said early today in Brussels. Gold for December delivery was at $1,728.90 an ounce, from $1,728.20 on November 21. There was no settlement Thursday because of the Thanksgiving holiday. The euro was little changed against the dollar as Merkel ruled out a budget accord until the New Year.