Commodities were closely following the foreign exchange markets Thursday morning, as both gold and oil rose significantly as the U.S. dollar weakened considerably. 

Oil is also reacting to talks out of Saudi Arabian oil officials, who indicated that the world's largest producer of oil will cut production to help put a floor on the quickly-decline price of crude.

Oil, Energy Markets

At of 2:30 p.m. preliminary close in New York, crude oil futures jumped $4.29, or more than 9.7%, to $47.81 a barrel in New York.

Commodities, despite the bearish economic data from the U.S. Department of Energy on Wednesday, gained primarily off of a weak-dollar/high-oil trade that had defined the commodities markets much earlier this year.

On Thursday, the U.S. dollar traded nearly 3% weaker against the euro, while the dollar was weaker against the British Pound by 1.4%. Both were large moves in the currency markets. The weak dollar could also been seen in the gold markets, where futures were higher by nearly 3% in earlier trading.

Earlier this year, crude oil hiked into unseen territory partially because the U.S. dollar struck multi-year lows against both the euro and the British Pound. The U.S. Dollar Index, which gauges the dollar’s value against a basket of currencies, hit a low of 70.7 in July only to rise back to the mid 80-range this month.

Commodities tend to inversely follow the dollar because it makes oil and other commodities, which are priced in dollars, cheaper abroad and therefore, stimulate demand.

Saudi Oil Minister Ali al-Naimi said while in Poland that the kingdom pumped 8.493 million barrels of oil a day in November, close to its OPEC production quota of 8.477 million barrels a day - a sign that the Saudis were making good on their pledge to cut production. Further, OPEC ministers indicated further production cuts could come if necessary.

The natural gas futures were the only futures not following the upward trend Thursday, after the Energy Department issued a report that showed less demand for natural gas than what energy analysts were expecting.

Natural gas futures were lower by 10 cents, or 1.76%, to $5.586 per million British Thermal Units after being mostly higher before the inventory reports

This comes after the Energy Department said U.S. natural gas inventories fell by 67 billion cubic feet in the week ending Nov. 6. Natural gas analysts interviewed by the energy firm Platts were looking for a draw of 82-87 billion cubic feet.

Heating oil futures, which are closely watched during the Winter heating season, gained 9.73 cents, or 6.94%, to $1.499 a barrel.

New York harbor gasoline futures, also known as the wholesale price for a gallon of gasoline, were higher by 10.58 cents, or 10.92%, to $1.0745 a gallon. Last week, gasoline futures had fallen briefly below $1 a gallon.

Metals 

Gold gained $15.60, or 1.93%, to $824.50 an ounce. Wholesale silver futures were higher by 22.5 cents, or 2.21%, to $10.39 an ounce.