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Sunday 12th of October 2008
May 31, 2006

Most metals prices, oil decline


by Elaine Frei

With the United States government announcing that it is willing to conduct talks with Iran if it will suspend its uranium enrichment program, and with the UN Security Council’s five permanent members scheduled to meet today to decide on incentives to offer Iran in return for that nation’s cooperation on nuclear issues, the price of crude oil dropped significantly during the day on Wednesday. The declines came ahead of a meeting of the Organisation of Petroleum Exporting Countries, during which the cartel is expected to hold production quotas at current levels.

July contract Brent crude oil on the International Petroleum Exchange declined by $1.73 to $69.32 per barrel in London, while West Texas Intermediate crude for July delivery lost $1.72 to $70.31 per barrel. The declines came even though Iran continued to say that it is determined to continue with its nuclear program, which is said includes the intention to build two nuclear reactors.

Base metals were mixed, with aluminium and copper prices dropping, but the price of nickel advancing. Prices for precious metals were down.

Gold lost 1.9 percent to $639.70 per troy ounce as tensions over the Iran situation subsided somewhat and as investors waited for release of the minutes of the most recent meeting of the US Federal Reserve, scheduled for later in the day. Meanwhile, silver was down 3.9 percent to $12.48 per troy ounce, while platinum declined by 2.9 percent to $1,246 per troy ounce and palladium dropped 2 percent to $348 per troy ounce.

Copper was down 1.1 percent to $7,860 per tonne as London Metal Exchange inventories grew by 6,150 tonnes and China got ready for an auction of copper next week. Aluminum was down 1.7 percent to $2,650 per tonne as investors waited to hear whether a possible strike against Alcoa would materialize when a labour contract expires at midnight. Most analysts, however, believed that the chances of a strike are slim. Nickel was up 1.4 percent after a significant loss on Tuesday.

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