Commodity prices tumble as world waits on US bailout
Sunday, 5 October 2008
LONDON, Oct 4 (AFP): Commodity prices slumped across the board this week as markets were roiled by growing anxiety over whether an emergency United States (US) bailout of ailing banks will get through Congress.
OIL: The price of oil nose-dived on concerns that energy demand was shrinking because of a US-led global economic slowdown, traders said.
They argued that should the bailout plan pass it could boost the flagging United States economy -- the largest global energy consumer -- and draw a line under the current financial markets crisis.
Oil "prices fell sharply ... as fears over the macroeconomic impact from the ongoing financial turmoil continue to dominate market sentiment," said Barclays Capital analyst Kevin Norrish.
The market was also dragged down on Wednesday by a surprise jump in crude inventories in the United States, which pointed towards weakening demand, traders said.
The US Department of Energy said crude stockpiles rose 4.3 million barrels in the week ending September 26, surprising traders who had expected a fall of around 1.7 million barrels.
US oil demand sank 7.1 per cent over the past four weeks compared with the same period a year ago, according to the DoE.
Oil also slumped by more than 4.50 dollars Thursday despite the US Senate's approval of the plan to buy up tainted mortgage-related assets.
The market, hit by weakening global demand, has dropped sharply from record highs above 147 dollars in July.
Meanwhile, oil prices closed little changed Friday after the US Congress approved a 700-billion-dollar bailout plan for the financial sector, helping recoup recent falls.
New York's main contract, light sweet crude for November delivery, closed nine cents lower at 93.88 dollars a barrel. It finished the week 13 dollars lower than at the start.
London's Brent North Sea crude for November fell 31 cents to 90.25 dollars.
Oil prices had fallen 4.50 dollars Thursday amid worries that the slowing global economy would reduce demand for crude and data published Friday gave further reason for worry.
US government data showed the struggling US economy lost 159,000 jobs in September as the weight of the housing collapse and credit crunch hit a broad swath of industries.
Elsewhere, French leaders scrambled to reassure consumers, voters and investors after the official statistics agency warned that the eurozone's second largest economy had slipped into recession.
In Washington Friday, the House of Representatives voted in favour of a revised plan to spend $700 billion(505 billion euros) supporting the financial sector.
"Growth fears are likely to cap gains in oil prices in the near future, until we start seeing a pick up in winter demand with some improving economic data from the developed world and concerns over the credit market recede," said Sucden analyst Andrey Kryuchenkov.
The market was dragged down this week by a surprise jump in crude inventories in the United States, the world's biggest consumer of energy.
The US Department of Energy (DoE) said Wednesday that crude stockpiles rose 4.3 million barrels in the week ending September 26, surprising traders who had expected a fall of around 1.7 million barrels.
US oil demand sank 7.1 per cent over the past four weeks compared with the same period a year ago, according to the DoE data.
Analysts at Merrill Lynch meanwhile slashed their 2009 global oil demand growth estimates.
Oil prices have dropped sharply from record high levels above 147 dollars reached in July on concerns that demand will falter badly.
PRECIOUS METALS: Gold prices led other precious metals downwards.
Gold was no longer benefiting from its status as a haven in times of economic turmoil. In late September, the precious metal had enjoyed its biggest one-day gain in almost three decades as equity markets plunged in response to the global financial crisis.
On the London Bullion Market, gold slumped to 828 dollars an ounce at Friday's late fixing from 902 dollars a week earlier.
Silver plunged to 11.20 dollars an ounce from 13.18 dollars.
On the London Platinum and Palladium Market, platinum fell to 959 dollars an ounce at the late fixing on Friday from 1,140 dollars a week earlier.
Palladium slid to 197 dollars an ounce from 235 dollars.
BASE METALS: Base metals prices plunged.
By Friday, copper for delivery in three months had fallen to 5,855 dollars per tonne on the London Metal Exchange from 6,825 dollars a week earlier.
Three-month aluminium dropped to 2,290 dollars per tonne from 2,514 dollars.
Three-month lead slid to 1,710 dollars per tonne from 1,985 dollars.
Three-month zinc declined to 1,580 dollars per tonne from 1,810 dollars.
Three-month tin decreased to 16,859 dollars per tonne from 17,951 dollars.
Three-month nickel tumbled to 15,399 dollars per tonne from 17,198 dollars.
COFFEE: Coffee prices hit 10-month lows.
"Arabica and Robusta coffee values slumped to the lowest level since December 2007 on Thursday as a strong dollar drove down prices of soft commodities," said the Public Ledger.
By Friday on LIFFE, London's futures exchange, Robusta for November delivery fell to 1,924 dollars per tonne from 2,128 dollars a week earlier.
On the New York Board of Trade (NYBOT), Arabica for December delivery slid to 123.55 US cents per pound from 135.80 cents.
COCOA: Cocoa prices declined but supply worries could soon see them rebounding.
"Ivory Coast's 2008/09 cocoa season failed to open on time on October 1 as shipping firms were still waiting for documentation to arrive while heavy, persistent rains in the country's main growing zones continue to raise concerns about the spread of black pod disease," noted the Public Ledger.
By Friday on LIFFE, the price of cocoa for December had slipped to 1,426 pounds per tonne from 1,536 pounds a week earlier.
On the NYBOT, the December cocoa contract retreated to 2,461 dollars per tonne from 2,756 dollars.
SUGAR: Sugar prices fell but were expected to rally going forward.
"The market is entering a transitional period before being driven by a stronger sentiment, linked to a deficit of production expected in 2009," said Sucden analyst Karim Salamon.
By Friday on LIFFE, the price per tonne of white sugar for December delivery dropped to 358 pounds from 404 pounds the previous week.
On NYBOT, the price of unrefined sugar for March delivery fell to 12.67 US cents per pound from 14.59 cents.
GRAINS AND SOYA: Grains and soya prices headed south in line with other commodities.
By Friday on the Chicago Board of Trade, maize for December delivery was down at 4.63 dollars per bushel from 5.43 dollars the previous week.
November-dated soyabean meal -- used in animal feed -- fell to 10.21 dollars from 11.64 dollars.
Wheat for December delivery dropped to 6.51 dollars per bushel from 7.16 dollars.
RUBBER: Malaysian rubber prices continued their decline amid weak demand as automobile makers and other industries slowed production.
A dealer with a rubber trading firm said the market had yet to reach bottom.
On Friday, the Malaysian Rubber Board's benchmark SMR20 fell to 254.30 US cents per kilo from 279.00 US cents per kilo a week earlier.
OIL: The price of oil nose-dived on concerns that energy demand was shrinking because of a US-led global economic slowdown, traders said.
They argued that should the bailout plan pass it could boost the flagging United States economy -- the largest global energy consumer -- and draw a line under the current financial markets crisis.
Oil "prices fell sharply ... as fears over the macroeconomic impact from the ongoing financial turmoil continue to dominate market sentiment," said Barclays Capital analyst Kevin Norrish.
The market was also dragged down on Wednesday by a surprise jump in crude inventories in the United States, which pointed towards weakening demand, traders said.
The US Department of Energy said crude stockpiles rose 4.3 million barrels in the week ending September 26, surprising traders who had expected a fall of around 1.7 million barrels.
US oil demand sank 7.1 per cent over the past four weeks compared with the same period a year ago, according to the DoE.
Oil also slumped by more than 4.50 dollars Thursday despite the US Senate's approval of the plan to buy up tainted mortgage-related assets.
The market, hit by weakening global demand, has dropped sharply from record highs above 147 dollars in July.
Meanwhile, oil prices closed little changed Friday after the US Congress approved a 700-billion-dollar bailout plan for the financial sector, helping recoup recent falls.
New York's main contract, light sweet crude for November delivery, closed nine cents lower at 93.88 dollars a barrel. It finished the week 13 dollars lower than at the start.
London's Brent North Sea crude for November fell 31 cents to 90.25 dollars.
Oil prices had fallen 4.50 dollars Thursday amid worries that the slowing global economy would reduce demand for crude and data published Friday gave further reason for worry.
US government data showed the struggling US economy lost 159,000 jobs in September as the weight of the housing collapse and credit crunch hit a broad swath of industries.
Elsewhere, French leaders scrambled to reassure consumers, voters and investors after the official statistics agency warned that the eurozone's second largest economy had slipped into recession.
In Washington Friday, the House of Representatives voted in favour of a revised plan to spend $700 billion(505 billion euros) supporting the financial sector.
"Growth fears are likely to cap gains in oil prices in the near future, until we start seeing a pick up in winter demand with some improving economic data from the developed world and concerns over the credit market recede," said Sucden analyst Andrey Kryuchenkov.
The market was dragged down this week by a surprise jump in crude inventories in the United States, the world's biggest consumer of energy.
The US Department of Energy (DoE) said Wednesday that crude stockpiles rose 4.3 million barrels in the week ending September 26, surprising traders who had expected a fall of around 1.7 million barrels.
US oil demand sank 7.1 per cent over the past four weeks compared with the same period a year ago, according to the DoE data.
Analysts at Merrill Lynch meanwhile slashed their 2009 global oil demand growth estimates.
Oil prices have dropped sharply from record high levels above 147 dollars reached in July on concerns that demand will falter badly.
PRECIOUS METALS: Gold prices led other precious metals downwards.
Gold was no longer benefiting from its status as a haven in times of economic turmoil. In late September, the precious metal had enjoyed its biggest one-day gain in almost three decades as equity markets plunged in response to the global financial crisis.
On the London Bullion Market, gold slumped to 828 dollars an ounce at Friday's late fixing from 902 dollars a week earlier.
Silver plunged to 11.20 dollars an ounce from 13.18 dollars.
On the London Platinum and Palladium Market, platinum fell to 959 dollars an ounce at the late fixing on Friday from 1,140 dollars a week earlier.
Palladium slid to 197 dollars an ounce from 235 dollars.
BASE METALS: Base metals prices plunged.
By Friday, copper for delivery in three months had fallen to 5,855 dollars per tonne on the London Metal Exchange from 6,825 dollars a week earlier.
Three-month aluminium dropped to 2,290 dollars per tonne from 2,514 dollars.
Three-month lead slid to 1,710 dollars per tonne from 1,985 dollars.
Three-month zinc declined to 1,580 dollars per tonne from 1,810 dollars.
Three-month tin decreased to 16,859 dollars per tonne from 17,951 dollars.
Three-month nickel tumbled to 15,399 dollars per tonne from 17,198 dollars.
COFFEE: Coffee prices hit 10-month lows.
"Arabica and Robusta coffee values slumped to the lowest level since December 2007 on Thursday as a strong dollar drove down prices of soft commodities," said the Public Ledger.
By Friday on LIFFE, London's futures exchange, Robusta for November delivery fell to 1,924 dollars per tonne from 2,128 dollars a week earlier.
On the New York Board of Trade (NYBOT), Arabica for December delivery slid to 123.55 US cents per pound from 135.80 cents.
COCOA: Cocoa prices declined but supply worries could soon see them rebounding.
"Ivory Coast's 2008/09 cocoa season failed to open on time on October 1 as shipping firms were still waiting for documentation to arrive while heavy, persistent rains in the country's main growing zones continue to raise concerns about the spread of black pod disease," noted the Public Ledger.
By Friday on LIFFE, the price of cocoa for December had slipped to 1,426 pounds per tonne from 1,536 pounds a week earlier.
On the NYBOT, the December cocoa contract retreated to 2,461 dollars per tonne from 2,756 dollars.
SUGAR: Sugar prices fell but were expected to rally going forward.
"The market is entering a transitional period before being driven by a stronger sentiment, linked to a deficit of production expected in 2009," said Sucden analyst Karim Salamon.
By Friday on LIFFE, the price per tonne of white sugar for December delivery dropped to 358 pounds from 404 pounds the previous week.
On NYBOT, the price of unrefined sugar for March delivery fell to 12.67 US cents per pound from 14.59 cents.
GRAINS AND SOYA: Grains and soya prices headed south in line with other commodities.
By Friday on the Chicago Board of Trade, maize for December delivery was down at 4.63 dollars per bushel from 5.43 dollars the previous week.
November-dated soyabean meal -- used in animal feed -- fell to 10.21 dollars from 11.64 dollars.
Wheat for December delivery dropped to 6.51 dollars per bushel from 7.16 dollars.
RUBBER: Malaysian rubber prices continued their decline amid weak demand as automobile makers and other industries slowed production.
A dealer with a rubber trading firm said the market had yet to reach bottom.
On Friday, the Malaysian Rubber Board's benchmark SMR20 fell to 254.30 US cents per kilo from 279.00 US cents per kilo a week earlier.