Oil prices rose for a fourth day on Friday, taking Brent towards three-year highs, as investors focused on tighter supplies amid strong appetite for riskier assets like crude and high hopes for recovery from the pandemic. Brent crude was up 40 cents, or 0.5% at $77.65 a barrel, after touching a two-month high on Thursday and closing at its highest since October 2018. U.S. oil was up 27 cents, or 0.4%, at 73.57 a barrel, having closed 1.5% in the previous session, the highest since the start of August. In a sign of strengthening fuel demand, capacity utilization rates at U.S. East Coast refineries increased to 93%, the highest since May 2019, Energy Information Administration (EIA) data showed. Inventories fell to the lowest in almost three years after damage from two hurricanes kept draws elevated in the United States, EIA data earlier in the week showed.  Some members of the Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, have also struggled to raise output following under-investment or delays to maintenance work during the worst global health crisis in 100 years. Still, U.S. oil refiners on the hunt for replacements for the U.S. Gulf crude lost to storms have been able to turn to Iraqi and Canadian oil, while Asian buyers have been switching to pursuing Middle Eastern and Russian grades, analysts and traders said.

Gold prices fell below $1,750 an ounce on Thursday, scalped by the scythe of U.S. bond yields after the Federal Reserve said it will likely end its pandemic-related stimulus support for the American economy by mid-2022 and embark on a rate hike from end of next year. U.S. gold futures’ most active contract, December, settled down $29, or 1.6%, at $1,749.80 per ounce on New York’s Comex, after a session low at $1,745.95. It was the second time in a week that gold had lost about 2% or more in response to the potential impact from Fed changes to its stimulus and rate hike. December gold had traded to as high as $1,788.25 on Wednesday before the central bank laid out its purported timetable for ending its monthly bond buying of $120 billion and rate hike from the current zero to 0.25%. Gold particularly came under pressure on Thursday after yields on the benchmark U.S. 10-year Treasury note hit above 1.4% for the first time since July. The yield is an indicator of market expectations about real inflation and how quickly the Fed will have to react to curb pressures. Fed Chair Jay Powell at the conclusion of the central bank’s monthly policy meeting on Wednesday repeated his mantra that inflation was trending above the Fed’s target of 2% per annum due to the higher costs of doing business in a pandemic-constrained economy.

The dollar wallowed near its lowest level in a week versus major peers on Friday, as improved risk sentiment wiped out recent gains amid easing concerns about contagion from a potential China Evergrande Group default. Risk appetite returned, lifting oil and global equities, even as hawkish comments from the Bank of England pushed up yields globally, with those on 10-year U.S. Treasury notes hitting the highest since July overnight at 1.437%. That failed to help the greenback though, with the U.S. Dollar Index, which measures the currency against a basket of six rivals, easing slightly to 93.068 from Thursday, when it slid 0.36% and touched the lowest since Sept. 17 at 92.977. That erased gains for the week, and set the index up for a 0.16% decline. Beijing injected fresh cash into its financial system on Thursday, as embattled property giant Evergrande announced it would make interest payments on an onshore bond. There has been no word yet, however, on whether it also made coupon payments on dollar bonds due that day, with more due next week.

Base metals prices were mixed on both the LME and SHFE on Thursday, with the broader markets welcoming the news that Chinese property giant Evergrande has avoided imploding, for now, and not spooked by the US Federal Reserve's more hawkish outlook. Three-month base metals prices on the London Metal Exchange were mixed this morning, with copper ($9,233 per tonne) and tin (34,900 per tonne ) down by 0.7% and 0.4% respectively, while the rest of the complex was up by an average of 0.4% - led by a 0.9% rise in lead ($2,140 per tonne) after the heavy metal had lagged behind in Wednesday’s broader rebound. The most-active base metals contracts on the Shanghai Futures Exchange were mainly firmer, the exception of October zinc, which was down by 0.3%. The rest were up by an average of 1.1%, led by gains of 2.3% in tin and 2.1% in aluminium. These two metals remain the most bullish as they are affected by supply disruptions.

Inspite of the slow increase in the demand from HoReCa (hotels, restaurants and catering) for edible oils, the Solvent Extractors’ Association (SEA) of India is of the view that the import of vegetable oils will be below 15 million tonnes for the second consecutive year during the current oil year 2020-21 (November-October).  Addressing the members of SEA of India at its 50th annual general meeting (AGM) in Goa on Thursday, Atul Chaturvedi, President of SEA of India, said the import of edible oils may be closer to 13.4 mt during the oil year 2020-21 against 13.17 mt in the previous year. He said this has been largely due to subdued demand caused by higher prices and Covid-related demand destruction. He said the country’s imports are likely to fall below 15 mt for the second consecutive year due to unprecedented high prices of vegetable oils in the international market. On the government’s plans to renegotiate free trade agreements (FTA) and bilateral trade agreements, he said that it is important for the Indian vegetable oil industry to actively participate in the process to safeguard legitimate interests of the industry and correct the anomalies that have inadvertently crept into the earlier agreements. On the vegetable oil imports front, the SEA said there is a cap on import duty that can be levied by the importing country. In the same way, the trade agreements should have similar restrictions and regulations on the export duty and levies to have a level-playing field.