Oil prices down for seventh straight session
Crude oil prices were down again on Tuesday on lower predictions of demand growth from both the International Energy Agency and the US Department of Energy. The IEA lowered its demand growth prediction by 100,000 barrels per day for both this year and next, to 1.1 million barrels per day this year and 1.5 million barrels per day in 2007. However, it also dropped its prediction of how much oil non-OPEC nations will produce in 2007 by 80,000 barrels per day to 1.8 million bpd, and said that OECD oil stockpiles are down to just 54 days of demand, a bit lower than last year at the same time. The United States, meanwhile, says that it expects global consumption growth will be at 1.2 million barrels per day this year and that demand will grow by 1.7 million barrels per day in 2007.
Also tending to send oil prices lower was a statement by US Secretary of State Condoleeza Rice that the US could join talks underway between the European Union and Iran now that Iran has offered to temporarily stop its uranium-enrichment operations. Brent crude October futures dropped 51 cents in London to $65.08 per barrel, while West Texas Intermediate for October delivery was 53 cents lower to $65.08 on the New York Mercantile Exchange. OPEC has indicated that it could cut its current production cap of 28 million barrels per day if prices continue to drop.
In metals markets on Tuesday, gold gained $1 to $592.00 per troy ounce as lower prices led to buying, while South Africa said that its output was 7.2 percent lower by volume in July compared to the same month last year. Silver and platinum were also up on the session, by 0.9 percent to $11.18 per troy ounce and 0.6 percent to $1,200 per troy ounce respectively, but palladium was 2.2 percent lower to $311 per troy ounce.
Base metals were also mixed, with copper up 0.5 percent to $7,500 per tonne. Zinc was 0.6 percent higher to $3,280 per tonne after a drop of 6.9 percent on Monday. Aluminium was lower, however, as it dropped 1.4 percent to $2,459 per tonne.
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