KUALA LUMPUR, Sept 27: Malaysian palm oil futures ended higher on Friday, snapping three straight sessions of losses and turning around weekly prices to post their first gain in three weeks, although predictions of surging supplies in the coming months kept investors wary.

Prices in early trade had hovered near month-and-a-half lows seen on Thursday as prospects of swelling supply of the tropical oil muted investor interest, but the ringgit’s poor performance late on Friday helped stoke demand and lift palm prices.

The ringgit eased 0.4 per cent on dollar-short covering in thin trading after a report showing the US jobless claims fell last week renewed some expectations that the Federal Reserve may scale back its stimulus soon. A weaker ringgit currency makes the feedstock cheaper for overseas buyers.

Palm oil supply could outstrip demand as top world producers Indonesia and Malaysia head into seasonally higher output cycles, said analysts and traders, further depressing prices which have been on a losing streak since 2011.

“Market players expect production to seasonally pick up towards the beginning of the monsoon season,” said a trader with a foreign commodities brokerage.

The benchmark December contract on the Bursa Malaysia Derivatives Exchange rose 2.0pc to 2,312 ringgit ($716) per tonne by Friday’s close.

Prices for the week rose 0.5pc, its first gain in three weeks.

Total traded volumes stood at 35,273 lots of 25 tonnes each, slightly above the average 35,000 lots.

Amid forecasts of surging output, both Indonesian and Malaysian governments have pledged to boost domestic consumption of palm oil for biodiesel to help whittle down stockpiles.

Palm oil feedstock is often used as a green alternative to produce biofuels.—Reuters