Oil leads commodity prices lower
Sunday, 14 September 2008
LONDON, Sept 13 (AFP): Crude oil futures slid to six- month lows below 100 dollars this week and many other commodities fell as the dollar rallied and surveys pointed to lower demand for raw materials amid an economic slowdown.
Losses were reduced late on and some commodities even ended higher from a week earlier as the dollar gains were cut in the wake of weak US economic data released on Friday, traders said.
OIL: Oil prices tumbled under 97 dollars a barrel on Thursday, reaching the lowest levels since early March, as the dollar struck a year-high against the euro and on concerns about falling demand for energy.
Prices fought back early on Friday after Hurricane Ike had forced the closure of energy production facilities in the Gulf of Mexico.
The dollar had meanwhile pushed the euro below 1.39 dollars, a 12-month trough, on growing recession fears in the eurozone. A strong dollar makes dollar-priced goods, such as oil, more expensive for buyers using weaker currencies.
A series of reports underlining weakening demand were meanwhile published this week. The US Department of Energy on Tuesday lowered its forecasts for 2009 global crude oil demand.
Then on Wednesday the DoE, in its weekly report on US energy stockpiles, said that demand for petroleum products in the United States, the world's largest consumer of crude oil, continued to fall and was now 3.8 per cent below its level a year ago.
PRECIOUS METALS: Gold prices dropped back under 800 dollars an ounce, striking the lowest point for almost one year, as the dollar strengthened.
Gold had Wednesday tumbled to 736.70 dollars, a level last seen in October 2007.
Platinum unravelled to a 20-month low and palladium reached a trough not seen for almost three years.
On the London Bullion Market, gold slumped to 750.25 dollars per ounce at Friday's late fixing from 808.50 dollars a week earlier.
Silver fell to 12.52 dollars per ounce from 12.72 dollars.
On the London Platinum and Palladium Market, platinum slid to 1,187 dollars per ounce at the late fixing on Friday from 1,387 dollars.
Palladium dropped to 241 dollars per ounce from 277 dollars.
BASE METALS: Base metals prices fell for most of the week but some managed a late rally as the dollar lost some of its spark as US retail sales data disappointed.
"We would view the price recovery as fragile and tenuous as sentiment remains weak," said analysts at Barclays Capital.
Base Metals analyst William Adams added: "This weakness is not confined to the base metals, all markets seem to be waking up to the fact that the global economy faces a slowdown."
By Friday, copper for delivery in three months rebounded to 7,075 dollars per tonne on the London Metal Exchange from 6,889 dollars a week earlier.
Three-month aluminium rose to 2,639 dollars per tonne from 2,595 dollars. Three-month lead fell to 1,895 dollars per tonne from 1,936 dollars. Three-month zinc climbed to 1,824 dollars per tonne from 1,780 dollars. Three-month tin dropped to 19,150 dollars per tonne from 19,425 dollars. Three-month nickel declined to 18,600 dollars per tonne from
20,226 dollars.
COFFEE: Coffee prices extended losses amid abundant supplies in Brazil.
By Friday on LIFFE, London's futures exchange, Robusta for November delivery fell to 2,154 dollars per tonne from 2,212 dollars a week earlier.
On the New York Board of Trade (NYBOT), Arabica for December delivery dropped to 139.20 US cents per pound from 147 cents.
COCOA: Cocoa prices also fell further. By Friday on LIFFE, the price of cocoa for December slid to 1,498 pounds per tonne from 1,544 pounds a week earlier.
On the NYBOT, the December cocoa contract declined to 2,569 dollars per tonne from 2,645 dollars.
SUGAR: Sugar prices hit seven-week lows as oil prices continued to fall and as Brazil announced a large rise is sugar cane production.
Sugar is used in the production of ethanol, a cheaper alternative to motor fuel which is refined from crude oil. When crude futures fall, demand for ethanol also wanes.
By Friday on LIFFE, the price per tonne of white sugar for December delivery slipped to 384.70 pounds from 388.60 pounds the previous week.
On NYBOT, the price of unrefined sugar for October delivery decreased to 12.43 US cents per pound from 12.77 cents.
Losses were reduced late on and some commodities even ended higher from a week earlier as the dollar gains were cut in the wake of weak US economic data released on Friday, traders said.
OIL: Oil prices tumbled under 97 dollars a barrel on Thursday, reaching the lowest levels since early March, as the dollar struck a year-high against the euro and on concerns about falling demand for energy.
Prices fought back early on Friday after Hurricane Ike had forced the closure of energy production facilities in the Gulf of Mexico.
The dollar had meanwhile pushed the euro below 1.39 dollars, a 12-month trough, on growing recession fears in the eurozone. A strong dollar makes dollar-priced goods, such as oil, more expensive for buyers using weaker currencies.
A series of reports underlining weakening demand were meanwhile published this week. The US Department of Energy on Tuesday lowered its forecasts for 2009 global crude oil demand.
Then on Wednesday the DoE, in its weekly report on US energy stockpiles, said that demand for petroleum products in the United States, the world's largest consumer of crude oil, continued to fall and was now 3.8 per cent below its level a year ago.
PRECIOUS METALS: Gold prices dropped back under 800 dollars an ounce, striking the lowest point for almost one year, as the dollar strengthened.
Gold had Wednesday tumbled to 736.70 dollars, a level last seen in October 2007.
Platinum unravelled to a 20-month low and palladium reached a trough not seen for almost three years.
On the London Bullion Market, gold slumped to 750.25 dollars per ounce at Friday's late fixing from 808.50 dollars a week earlier.
Silver fell to 12.52 dollars per ounce from 12.72 dollars.
On the London Platinum and Palladium Market, platinum slid to 1,187 dollars per ounce at the late fixing on Friday from 1,387 dollars.
Palladium dropped to 241 dollars per ounce from 277 dollars.
BASE METALS: Base metals prices fell for most of the week but some managed a late rally as the dollar lost some of its spark as US retail sales data disappointed.
"We would view the price recovery as fragile and tenuous as sentiment remains weak," said analysts at Barclays Capital.
Base Metals analyst William Adams added: "This weakness is not confined to the base metals, all markets seem to be waking up to the fact that the global economy faces a slowdown."
By Friday, copper for delivery in three months rebounded to 7,075 dollars per tonne on the London Metal Exchange from 6,889 dollars a week earlier.
Three-month aluminium rose to 2,639 dollars per tonne from 2,595 dollars. Three-month lead fell to 1,895 dollars per tonne from 1,936 dollars. Three-month zinc climbed to 1,824 dollars per tonne from 1,780 dollars. Three-month tin dropped to 19,150 dollars per tonne from 19,425 dollars. Three-month nickel declined to 18,600 dollars per tonne from
20,226 dollars.
COFFEE: Coffee prices extended losses amid abundant supplies in Brazil.
By Friday on LIFFE, London's futures exchange, Robusta for November delivery fell to 2,154 dollars per tonne from 2,212 dollars a week earlier.
On the New York Board of Trade (NYBOT), Arabica for December delivery dropped to 139.20 US cents per pound from 147 cents.
COCOA: Cocoa prices also fell further. By Friday on LIFFE, the price of cocoa for December slid to 1,498 pounds per tonne from 1,544 pounds a week earlier.
On the NYBOT, the December cocoa contract declined to 2,569 dollars per tonne from 2,645 dollars.
SUGAR: Sugar prices hit seven-week lows as oil prices continued to fall and as Brazil announced a large rise is sugar cane production.
Sugar is used in the production of ethanol, a cheaper alternative to motor fuel which is refined from crude oil. When crude futures fall, demand for ethanol also wanes.
By Friday on LIFFE, the price per tonne of white sugar for December delivery slipped to 384.70 pounds from 388.60 pounds the previous week.
On NYBOT, the price of unrefined sugar for October delivery decreased to 12.43 US cents per pound from 12.77 cents.