LONDON: Commodity markets were haunted by demand fears this week in the face of mounting global economic worries, with crude oil prices striking four-year lows and base metals also suffering heavy falls.
Markets around the world have been hammered by worries about the global economy as the eurozone, China and Japan struggle to reignite growth.
Those fears increased this week when data from the United States, which has been the only economy showing signs of strength, came in well below expectations.
OIL: Brent hit a fresh four-year low after another sharp sell-off in equities. Brent sank on Thursday to $82.60 — a level last seen on November 23, 2010. New York crude slid to $79.78 per barrel, in the first drop below $80 since June 2012.
Adding to the pain is a supply glut caused by strong US shale production and a return of Libyan oil on to the market after facilities that were closed due to civil unrest resumed operations. Crude futures have also tumbled on fears that slowing economic growth will hit demand, leaving an even bigger surplus.
The market rebounded on Friday on bargain-buying, but analysts expect any gains to be limited, given the current high level of crude supplies and dwindling global demand. Adding to the bearish picture, key producers such as Saudi Arabia are slashing prices to gain market share while maintaining output.
Members of the Opec are keeping up their output levels despite fears over sliding revenues for the cartel.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in December had sunk to $86.20 a barrel compared with $89.85 for the November contract one week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for November recoiled to $83.27 per barrel, from $85.68 a week earlier.
PRECIOUS METALS: Gold forged a five-week peak at $1,249.84 per ounce thanks to demand for the perceived safe haven driven by disappointing global data. The yellow metal won further support from the weaker dollar and worries over the health of bailed-out Greece.
By late Friday on the London Bullion Market, the price of gold had risen to $1,234.25 an ounce from $1,219 a week earlier. Silver increased to $17.36 an ounce from $17.26. On the London Platinum and Palladium Market, platinum firmed to $1,259 an ounce from $1,256. Palladium dropped to $753 an ounce from $784.
BASE METALS: Base or industrial metal prices mostly fell on intensifying anxiety over sliding global stock markets, weak demand and faltering world growth.
By Friday on the London Metal Exchange, copper for delivery in three months reversed to $6,615 a tonne from $6,631.50 a week earlier. Three-month aluminium increased to $1,962 a tonne from $1,923.75. Three-month lead decreased to $2,030 a tonne from $2,059.25. Three-month tin sank to $19,426 a tonne from $19,961. Three-month nickel fell to $15,648 a tonne from $16,462. Three-month zinc decreased to $2,245.75 a tonne from $2,313.75.
COFFEE: The market pushed lower as some traders cashed in profits following recent sharp gains. By Friday on ICE Futures US, Arabica for delivery in December dipped to 213.20 US cents a pound from 220.80 cents a week earlier. On LIFFE, London’s futures exchange, Robusta for November slipped to $2,152 a tonne from $2,186 a week earlier.
COCOA: Prices diverged, with traders still on edge about the potential market impact of the Ebola outbreak in west Africa, home to 70 percent of world cocoa production.
Cocoa had soared last month to 3.5-year peaks on worries that Ebola could hit output in Ivory Coast and Ghana—the two biggest producers which account for 60 percent of the world’s cocoa. By Friday on LIFFE, cocoa for delivery in December rose to £2,038 a tonne from £2,029 a week earlier. On the ICE Futures US exchange, cocoa for December reversed to $3,119 a tonne from $3,128 a week earlier.
SUGAR: The sugar market drifted lower in subdued trade. By Friday on LIFFE, the price of a tonne of white sugar for delivery in December traded at $426.40 compared with $425.10 a week earlier. On ICE Futures US, the price of unrefined sugar for March fell to 16.59 US cents a pound from 16.63 US cents a week earlier.
RUBBER: Kuala Lumpur prices rose following an announcement by Malaysia’s government that it would help the rubber industry with soft loans. The Malaysian Rubber Board’s benchmark SMR20 stood at 149.90 US cents per kilo on Friday, up from 143.55 US cents the previous week.
AFP
