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Wednesday 15th of October 2008
October 23, 2006

Oil prices drop another dollar per barrel


by Elaine Frei

Crude oil prices were down on Monday despite last week’s announcement of production cuts from OPEC and in the face of a possible further cut in December. A number of analysts, however, doubt that the promised cuts will materialize since some of the nations scheduled to make cuts from actual production are already having trouble making their quotas. Those oil producers currently producing below their quotas include Nigeria, Indonesia, and Venezuela. Saudi Arabia is expected to absorb one-third of the production cuts and has told core customers in Asia that supplies will be 8 percent lower beginning in November.

Brent crude for December delivery dropped $1 to $58.68 per barrel, while West Texas Intermediate crude December contracts on the New York Mercantile Exchange were down $1.04 to $58.29 per barrel.

In the metals markets on Monday, gold dropped 2 percent to $583.70 per troy ounce, following oil downward, while silver traded at $11.62 per troy ounce, platinum was at $1,067 per troy ounce, and palladium traded at $315 per troy ounce.

Base metals were mixed, with nickel and tin higher but zinc, copper, and aluminium lower. Nickel added 1.1 percent to $32,400 per tonne, retreating from a new high of $32,700 earlier in the session, as inventories were at less than a day’s global consumption and a strike continued at a smelter in New Caldedonia. Tin was 2.5 percent higher to $10,400 per tonne with around 20 smelters in Indonesia still shuttered by the government there.

Copper was 0.2 percent lower to $7,545 per tonne, aluminium dropped 0.4 percent to $2,707 per tonne, and zinc fell 1.1 percent to $3,925 per tonne even though London Metal Exchange inventories were down by 2,500 tonnes to 122,400 tonnes of available metal.

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