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Tuesday 02nd of December 2008
June 19, 2006

Oil, metals prices head lower


by Elaine Frei

Crude oil prices dropped on Monday as Iran continued to take a conciliatory path over negotiations dealing with its nuclear ambitions. While tensions remain, several Iranian officials have called a western incentive package a “step forward” in the ongoing dispute.

Meanwhile, the Organization of Petroleum Exporting Countries said that it expects oil demand to rise in the second half of 2006 despite higher prices and rising interest rates. It further said that there were signs that demand will ease, but not until next year.

The price for Brent crude August contracts was 96 cents lower at $67.84 per barrel at late afternoon in London on the International Petroleum Exchange. July delivery West Texas Intermediate crude had declined by 88 cents to $69.00 per barrel in late morning trade on the New York Mercantile Exchange.

In the metals markets, gold prices were lower as the US dollar strengthened. At late afternoon in London, gold had lost over $8 to trade at $570.20/$570.90 per troy ounce. Silver was also down, by 20 cents to $9.88/$8.98 per troy ounce.

Three-month copper on the London Metal Exchange dropped $245 to $6,735 per tonne after China’s central bank said it would tighten credit. The price of copper fell even though LME copper inventories are down to their lowest level since February due to supply disruptions in Chile, Indonesia, and Mexico.

The price of zinc and nickel also dropped despite scant inventories. Zinc lost $90 to $2,985 per tonne, while nickel dropped $440 to $18,750 per tonne. Aluminium was also down on the day, by $85 to $2,480 per tonne.

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