Finance Markets

July 11, 2006

Demand, low stockpiles raise nickel prices

Filed under: Commodities, Oil, Metals, Economy

Oil prices were up on Tuesday as Iran refused to provide a reply to a set of incentives offered by the European Union and the United States in return for suspension of its nuclear development program. In addition, the Organization of Petroleum Exporting Countries asked once again for a “demand road map” from consumers and also repeated charges that oil is being taxed unfairly in Europe in relation to other energy sources.

Brent crude for August delivery was up 77 cents to $73.66 per barrel on the International Petroleum Exchange in London, while August contracts for West Texas Intermediate crude was up by 64 cents to $74.25 per barrel in early afternoon trade on the New York Mercantile Exchange.

Meanwhile, in the metals markets, three-month nickel rose to another new record high as it touched $25,700 per tonne before dropping back to $25,600 late in the day in London. The spot price for the metal, used in the manufacture of stainless steel, was even higher, at $27,650 per tonne in late trade. This brings nickel’s rise since the first of the year to 90 percent. Inventories in London Metal Exchange warehouses is down to 8,400 tonnes, half of it already paid for by customers who have not yet taken delivery. Higher demand from China is a key reason for the rising price of nickel. Copper, aluminium, and zinc prices were also higher.

Gold prices firmed by $15 to $637.50 per troy ounce after the train bombings in Mumbai during the evening rush hour there sent political tensions higher around the world. Silver was also up, by 50 cents, to $11.53 per troy ounce.

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Permalink: Demand, low stockpiles raise nickel prices


July 10, 2006

Oil prices down as EU/Iran talks begin

Filed under: Commodities, Oil, Metals, Economy

Three-month nickel futures were up 3.2 percent on Monday to trade at $24,650 per tonne after rising as high as $24,750 earlier in the day. The advance was spurred by inventories that are down to around two days of global consumption. London Metal Exchange warehouses are down to stockpiles of 8,904 tonnes, their lowest level in nearly a year.

The advance in nickel took other base metals with it. Copper added 0.3 percent to $7,760 per tonne, while zinc gained 1.6 percent to $3,505 per tonne after LME inventories dropped to 207,250 tonnes, a five year low.

Precious metals, however, saw declines during the session. Gold dropped 0.5 percent to $626.90 per troy ounce in European trade after falling as far as $620 per troy ounce earlier in the day. Silver was down 1.3 percent to trade at $11.16 per troy ounce.

Crude oil prices were also down after representatives from Iran said that opening talks with the European Union over the Middle Eastern nation’s nuclear program were “fruitful”. One analyst said that oil prices could drop as much as $5 per barrel if Iran agrees to the EU incentive package. Elsewhere Kuwait, which holds around one-tenth of world oil reserves, appointed a new energy minister.

August contracts for Brent crude were down $1.01 to $72.50 per barrel on the International Petroleum Exchange in London. Meanwhile, West Texas Intermediate crude dropped 82 cents to $73.27 per barrel on the New York Mercantile Exchange by mid-session.

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Permalink: Oil prices down as EU/Iran talks begin


July 7, 2006

WTI hits new high before declining

Filed under: Commodities, Oil, Metals, Economy

Metals prices rose during the week as supplies were low and demand continued. Copper added around 6 percent on the London Metal Exchange even though it was down by $130 on Friday from Thursday’s close to trade at $7,750 per tonne on Friday, remaining approximately $1,000 below its May 11 record high even though it is up 22 percent since mid-June. Meanwhile, nickel added 12 percent this week, hitting a new record of $24,100 per tonne before easing back to $23,900 per tonne. Gold lost about $1 Friday, but ended the week 3 percent higher, trading at $631.20/$632.00.

Brent crude oil August contracts added 69 cents to $74.77 per barrel on the International Petroleum Exchange in London, a gain of 1.6 percent during the week. West Texas Intermediate crude set a new record high prices early in the day, reaching $75.78 per barrel, but by late morning it had retreated to $75.40 per barrel, still ahead by 26 cents. In early afternoon trade on the New York Mercantile Exchange, however, WTI had declined to $74.75, down 39 cents from Thursday’s close.

Analysts said that oil prices were being supported by increased demand, reported by the US energy department to be up over last year’s levels for the seventh straight four-week period as high pump prices did not seem to be discouraging US drivers. Geopolitical concerns in both Iran and Korea were also cited as factors in keeping oil prices up.

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Permalink: WTI hits new high before declining


July 6, 2006

Crude oil prices drop as US gasoline stockpiles grow

Filed under: Commodities, Oil, Metals, Economy

Crude oil prices dropped on Thursday after Wednesday’s gains, which were driven by worries over the situations in Iran and North Korea. Brent crude for August delivery was down 44 cents to $73.54 per barrel on the International Petroleum Exchange in London, while by mid-session West Texas Intermediate crude had dropped by 69 cents to $74.50 per barrel. Nymex unleaded gasoline for August delivery was down by 3.28 cents to $2.2430 per gallon.

US crude oil stockpiles were down 2.4 million barrels in the week ending June 30, more than the 1.9 million barrel decline that was expected. Gasoline inventories, on the other hand, were up by 700,000 barrels for the week in the face of an expected drop of 1.1 million barrels. The increase in gasoline stockpiles was driven by higher imports and a drop in refinery capacity used to 93.1 percent, an expected decline due to maintenance.

In the metals markets, gold added 1 percent to $633.10/$634.60. Copper added 6.6 percent to $7,855 per tonne on low inventories, while nickel gained 3.9 percent to an all-time high price of $23,650 per tonne, and three-month aluminium was up 4.9 percent to $2,599.5 per tonne. Aluminium prices were aided by purchases by Japan and a decline in London Metal Exchange warehouses.

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Permalink: Crude oil prices drop as US gasoline stockpiles grow


July 5, 2006

Crude oil at new high prices

Filed under: Commodities, Oil, Metals, Economy

August contracts for West Texas Intermediate crude oil reached a new record high on Wednesday afternoon on the New York Mercantile exchange when it reached $75.40 per barrel on the first day back for traders after the Independence Day holiday. The previous record of $75.35 per barrel was reached on April 24. The rise in prices came after it was announced that scheduled talks between Iran and the European Union over Iran’s nuclear program have been postponed.

Meanwhile, on the International Petroleum Exchange in London, Brent crude for August delivery added $1.58 to $74.09 per barrel.

In the metals markets, spot nickel prices rose $350 per tonne to a new high of $24,000 per tonne, while three-month nickel was up to $23,000 per tonne, close to a record high. The price gains came as inventories in London Metal Exchange warehouses dropped to 9,258 tonnes on Wednesday. Nickel stockpiles have dropped by nearly 75 percent since the end of 2005, primarily due to supply disruptions.

Three-month copper dropped $60 to $7.350 per tonne.

Among precious metals, gold hit a one-month high of $630.50 per troy ounce in Asian trade after news of North Korea’s missile tests. However, by late in the day in London, prices settled at $624.10/$624.70 per troy ounce, a gain of $2.50 for the session.

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Permalink: Crude oil at new high prices


July 3, 2006

Oil and precious metals up; most base metals lower

Filed under: Commodities, Oil, Metals, Economy

Oil prices were higher Monday despite the highest inventory levels in twenty years in the developed nations of the world on the expectation that high pump prices for gasoline will not keep US holiday drivers off the road over the Independence Day holiday on Tuesday. While the inventory numbers show that there is no shortage of crude oil, investors are worried about the supply of refined oil products, especially of gasoline and diesel, with stockpiles of those products in the middle of long term averages.

With the New York Mercantile Exchange closed until Wednesday for the holiday, there are no prices for West Texas Intermediate Oil available. It closed on Friday at $73.85 per barrel, just $1.50 below its record high, sent in May. August delivery Brent crude on the International Petroleum Exchange in London had gained 40 cents by late afternoon on Monday to $73.91 per barrel.

Trade was slow in the metals markets on Monday as well. Gold was up $12 to $624/$625 per troy ounce after hitting a month-long high of $625.05 during the day, having gained 15 percent in the past two weeks on talk that the central banks in China and in the United Arab Emirates are thinking about increasing their gold reserves. Silver and platinum were up as well, to $11.27 per troy ounce and $1,242 per troy ounce respectively.

In contract to precious metals, base metals were mostly down, with copper dropping $80 to $7,240 per tonne on the London Metal Exchange. Aluminum was lower as well, by $30 to $2,600 per tonne. With inventories down to around 7,000 tonnes in LME warehouses, nickel bucked the trend and added $450 to $21,800 per tonne.

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Permalink: Oil and precious metals up; most base metals lower


June 30, 2006

Commodities prices gain

Filed under: Commodities, Oil, Metals, Economy

Metals prices were up on Friday as the US dollar weakened in the face of more possible interest rate hikes to come.

Gold added 3.6 percent on the day to $613.50 per troy ounce. It was up over 5 percent this week and is up 19 percent since the beginning of the year, even after dropping $100 dollars from its peak on May 12. Silver was up 7 percent during the week to more than $11 per troy ounce, and is 25 percent higher than its price at the beginning of the year, again despite a 27 percent decline since it peaked on May 11.

Base metals have risen even more this year. Three-month copper was up $130 on Friday to $7,430 per tonne on the London Metal Exchange, taking it up nearly 10 percent this week. Copper prices have risen more than 67 percent since the beginning of the year.

Zinc added 13 percent on the week to $3,240 per tonne, and is up more than 71 percent since the start of the year. Nickel traded at $212,325 per tonne, a gain of 10 percent this week and around 58 percent higher than at the year’s start.

Crude oil prices were also up. Brent crude August contracts had added 20 cents to $73.09 per barrel by late in the day on the International Petroleum Exchange in London. This took Brent 4.5 percent higher this week and almost 26 percent higher since the beginning of the year. Meanwhile, West Texas Intermediate crude for August delivery was up 28 cents halfway through the morning session in New York to $73.80 per barrel, a gain of 4 percent on the week and more than 20 percent higher than its price at the beginning of January.

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June 29, 2006

Crude oil again above $73 per barrel

Filed under: Commodities, Oil, Metals, Economy

Crude oil prices were up on Thursday for the seventh straight session amid data showing that US gasoline consumption is at 9.45 million barrels per day, an indication that high pump prices are not cutting into demand. Brent crude for August delivery gained $1.50 to $72.91 per barrel on the International Petroleum Exchange in London. August contracts for West Texas Intermediate crude added $1.21 to $73.40 per barrel on the New York Mercantile Exchange. Meanwhile, Nymex unleaded gasoline July contracts were up 6.7 cents to $2.2700 per gallon.

Precious metals were up on Thursday, as well. Gold gained 1.6 percent to $588.80 per troy ounce after going as high as $591.80 during the day. Silver was up 2.6 percent to $10.45 per troy ounce. Palladium advanced by 0.6 percent to $309 per troy ounce, while platinum added 0.8 percent to $1,193 per troy ounce.

Copper gained 3.6 percent to $7.335 per tonne, but traders held that price changes for base metals were exaggerated due to low trade volumes. Zinc was up 5.6 percent to $3,305 per tonne as stockpiles in London Metal Exchange warehouses dropped by 1,775 tonnes.

While nickel inventories in LME warehouses were up by 198 tonnes, the price of nickel still gained 3.3 percent to $21,075 per tonne. Despite the increase in nickel stockpiles, global inventories are down by 60 percent this year and are currently at only 3 days of global consumption.

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Permalink: Crude oil again above $73 per barrel


June 28, 2006

Crude oil, gasoline inventories lower in US

Filed under: Commodities, Oil, Metals, Economy

With crude oil and gasoline inventories in the United States down ahead of the July 4 holiday, crude oil prices were back above $72 per gallon on Wednesday. Crude oil stockpiles were down by 3.4 million barrels in the week ending June 23, much more of a decline than the 0.8 million barrels retreat than had been expected. Meanwhile, gasoline inventories were down during the week by 1 million barrels, also more than analysts had expected.

At the same time, gasoline demand in the United States was running at 9.5 million barrels per day, a record, even though pump prices remain high. The American Automobile Association predicted that 1.2 percent more Americans would travel 50 miles or more from home over the Independence Day holiday. Supply concerns thus remained high with deliveries from three Louisiana refineries still cut off due to an oil spill in a shipping channel. Some companies have asked to loans from US strategic reserves to hold them over until the channel reopens and deliveries resume.

Brent crude for August delivery was up 76 cents to $71.74 per barrel on the International Petroleum Exchange, while August contract West Texas Intermediate crude added 53 cents to $72.19 per barrel on the New York Petroleum Exchange. Nymex July unleaded gasoline gained 1 cent to $2.2060 per gallon.

Metals prices were mixed Wednesday. In precious metals, gold dropped 0.1 percent to $580.80 per troy ounce, but silver added 0.6 percent to $10.24 per troy ounce. Platinum and palladium were both down, with platinum dropping 0.5 percent to $1,190 per troy ounce and palladium falling 2.2 percent to $307 per troy ounce.

Among base metals, copper added 1.6 percent to $6,850 per tonne, while nickel was up 3.5 percent to $20,550 per tonne. Zinc held steady at $2,920 per tonne, and aluminium dropped 0.3 percent to $2,477.5 per tonne.

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June 27, 2006

Crude oil prices rise on new Iran concerns

Filed under: Commodities, Oil, Metals, Economy

The price of crude oil rose again on Tuesday after Iran’s Ayatollah Ali Khamenei reiterated his nation’s position that it has a right to develop and use nuclear technology and said that there was no point in negotiating with the United States concerning the issue. Also sending prices higher were continuing supply concerns after the shipping channel between Lake Charles, Louisiana and the Gulf of Mexico was shut down due to an oil spill. The closure, which is expected to last for several days, has cut deliveries from three refineries and a liquefied natural gas terminal.

August contract Brent crude was up 63 cents to $71.27 per barrel on the International Petroleum Exchange in London, while West Texas Intermediate crude for August delivery was 50 cents higher to $72.30 per barrel on the New York Mercantile Exchange. Meanwhile, Nymex August unleaded gasoline added 1.4 cents to 2.1925 per gallon.

A report of two earthquakes of moderate intensity in Chile, as well as a decline of 2,000 tonnes in London Metal Exchange stockpiles, initially sent copper prices up during the day. However, after peaking at $7,105 per tonne, prices ended up 1.7 percent lower at $6,880 per tonne. A report from the International Copper Study Group said that the first quarter of 2006 saw a surplus of 64,000 tonnes in the copper market, compared with a deficit of 89,000 tonnes during the same period last year. The report added, however, that there was no evidence of the reported surplus in warehouses and that consumption data is often revised upward.

Nickel inventories also fell during the day, by 696 tonnes, sending the price of nickel up 1.4 percent to $20,250 per tonne. The prices of zinc and aluminium were down by 0.5 percent to $2,975 per tonne and by 1.7 percent to $2,505 per tonne respectively.

Precious metals prices were up during the day. Gold added 1.8 percent to $595.60 per troy ounce, while silver was up 3.3 percent to $10.60 per troy ounce. The price of platinum rose slightly to $1,190 per troy ounce and palladium was trading at $313 per troy ounce.

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Permalink: Crude oil prices rise on new Iran concerns


June 26, 2006

Metals prices mixed; crude oil sees slight gains

Filed under: Commodities, Oil, Metals, Economy

Most precious metals prices were mixed on Monday, while base metals saw prices increase during the day.

Gold dropped 0.7 percent to $579.15 per troy ounce as prices remained caught up in concerns over economic growth and rising inflation. Silver prices also declined, dropping 1.8 percent to $10.11 per troy ounce. On the other hand, the price of platinum was up 1.4 percent and the price of palladium gained 3 percent, to $1,182 per troy ounce and $310 per troy ounce respectively.

Copper prices added 2.3 percent to $6,937.5 per tonne late in the day in London. Forecasts have mine capacity growing faster than smelter capacity through 2009. Meanwhile, the price of nickel was 2.7 percent higher, to $19,775 per tonne as London Metal Exchange stockpiles dropped by 750 tonnes to 11,800 tonnes.

Crude oil prices were somewhat higher, with Brent crude August contracts up 1 cent to $69.94 per barrel on the International Petroleum Exchange in London, while West Texas Intermediate crude for August delivery had gained 18 cents to $71.05 per barrel by mid-morning on the New York Mercantile Exchange.

Part of the gains had to do with a threat by Iran over the weekend that it would use oil as a weapon if there was a confrontation with Western nations over its nuclear enrichment program. Meanwhile, in Iraq, the oil minister there said that his nation’s oil output could rival Saudi Arabia’s in a decade. Oil production in Iraq was up in May. Data also showed that demand for oil was up in China in May, with a 13.5 percent increase year-on-year as output has increased and exports were cut.

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Permalink: Metals prices mixed; crude oil sees slight gains


June 23, 2006

Crude oil prices rise; metals mixed on day

Filed under: Commodities, Oil, Metals, Economy

Crude oil prices rose Friday on concerns about supply during the summer driving season, on a possible strike by oilfield service workers in Norway, and on news that a new tropical storm could be building in the Atlantic Ocean. The weather concerns came although there was little chance that the storm would strengthen into a hurricane and was not expected to enter the oil producing areas of the Gulf of Mexico.

Brent crude August contracts added 21 cents to $70.16 per barrel by late afternoon on the International Petroleum Exchange in London. Brent was up 2 percent for the week. West Texas Intermediate crude for August delivery, meanwhile, gained 26 cents to $71.10 per barrel in late morning trade on the New York Mercantile Exchange, for a gain of 1.7 percent on the week. Gasoline futures in the US gained 4 percent on during the week.

In metals markets, gold dropped $4 Friday to $577.70/$578.00 by late afternoon in London. Gold has fallen 20 percent from its 25-year-high, reached on May 12. This was the first week in six weeks that gold has not advanced over the week.

Copper added $91 to trade at $6,709 per tonne by late afternoon on Friday, but was still $180 lower for the week. The declines came even though London Metal Exchange inventories are down to two days of world consumption of the metal and strikes are ongoing at two Mexican mines and threaten in Chile.

Aluminium on the LME lost $37 on Friday and $120 during the week to $2,448 per tonne, while zinc declined by $80 to $2,860 per tonne on Friday and dropped 7 percent over the week as inventories were up.

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Permalink: Crude oil prices rise; metals mixed on day


June 20, 2006

Metals prices higher

Filed under: Commodities, Oil, Metals, Economy

Metals prices were up a bit on Tuesday. Gold added $1 from yesterday’s late quote in New York to trade at $569.70/$570.70 per troy ounce at the end of the session in London after having gone as low as $560 per troy ounce earlier in the session. Silver, meanwhile, added 20 cents to close the day in London at $10.09 per troy ounce.

Copper was also up, adding $20 to trade at $6,800 on the London Metal Exchange after trading lower than yesterday’s prices for most of the session. Copper inventories in LME warehouses are still very low. Also playing into the price rise was a strike threat at Chile’s Escondida mine and fears of lower demand due to China’s move to make loans more difficult to obtain.

Crude oil prices, however, were lower on the day, even though the US Energy Information Administration said that long term oil demand will rise to 118 million barrels per day by the year 2030, from current demand levels of around 86 million barrels per day even though higher prices would cut some usage. It sees most of the demand growth coming in the transportation sector, where there are few practical alternatives to the use of petroleum products. The EIA also said that by 2030, the share of the worlds oil demand supplied by the OPEC nations would drop from 39.7 percent to 38.4 percent.

Also apparently not affecting the price of oil was a statement from the Saudi Arabian ambassador to the United States, who said yesterday that oil prices could triple if the current conflict over Iran’s nuclear program takes a military turn.

August contracts for Brent crude lost 31 cents to $67.80 per barrel by late afternoon on the International Petroleum Exchange in London. West Texas Intermediate crude for July delivery lost 18 cents to $68.80 per barrel by late morning on the New York Mercantile Exchange. With that contract closing and the end of trade today, WTI for August delivery came into focus, dropping 45 cents to $69.10 per barrel.

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June 19, 2006

Oil, metals prices head lower

Filed under: Commodities, Oil, Metals, Economy

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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Permalink: Oil, metals prices head lower


June 16, 2006

Oil prices fall on week

Filed under: Commodities, Oil, Metals, Economy

Despite gains later in the week, commodities markets were not able to recover from sell-offs early in the week as investors worried about inflation and interest rates.

The price of gold gained $7 on Friday to trade at $573.50/$574.20 per troy ounce. Even though it managed to gain 5 percent from early-week lows, it was still 5 percent lower over the week. Silver lost 10 percent on the week as a while to trade at $10.04/$10.14 per troy ounce.

Copper was up by $30 to $7,025 per tonne on Friday on the London Metal Exchange, but it still ended the week lower by $175. It remains to be seen where prices will go after a Sunday contract vote by workers at the world’s largest copper mine, where BHP Billiton and Rio Tinto are the biggest shareholders.

The price of crude oil was down on Friday, with Brent crude August contracts dropping by 54 cents to $67.90 by late afternoon on the International Petroleum Exchange in London. Despite the fact that Brent was up $1.80 from Wednesday’s price, it still lost 3.5 percent over the week.

West Texas Intermediate crude July contracts were down by 45 cents by mid-morning on Friday on the New York Mercantile Exchange, trading at $69.05 per barrel. This put WTI around 3.5 percent lower for the week. The higher price for WTI compared to Brent had to do with concerns about the new hurricane season and the specter of supply disruptions similar to last year’s.

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June 14, 2006

US crude oil inventories drop

Filed under: Commodities, Oil, Metals, Economy

New figures released by the Energy Information Administration in the United States show that crude oil stockpiles were down by 900,000 barrels in the week ending June 9, a larger decline than had been expected and a sign that imports were lower and that refineries were processing more crude into petroleum products. Despite the decline, inventories are still well above average and do not signal a shortage.

Gasoline stockpiles were up for the seventh week in a row, adding a more than expected 2.8 million barrels to gasoline in storage during the week. The EIA also reported that distillate demand - heating oil, primarily - was unchanged in the past month, while demand for gasoline was up 0.6 percent and jet fuel demand was up 4 percent over last year’s levels.

By late afternoon, Brent crude for July had dropped 54 cents by late afternoon, to $66.38 per barrel on the International Petroleum Exchange in London. With the July contract expiring at the end of the day Thursday, August contracts attracted more sales, and were down 25 cents to $68.04 per barrel. Meanwhile, West Texas Intermediate crude for July delivery dropped just one cent in late morning trade on the New York Mercantile Exchange, to $68.55 per barrel.

In the metals markets, prices trended higher in both precious and base metals. Gold added around $2 to trade at $564.60/$565.30 per troy ounce by late afternoon in London. Silver was up by 20 cents to $9.76/$9.86 per troy ounce, and platinum gained $26 to $1,142 per troy ounce on reports that output would not meet forecasts.

Copper was up $2 to $6,570 per tonne after having lost 9 percent of its value in the past two sessions. Aluminium gained $38 to $2,495 per tonne, while zinc held steady at $2,960 per tonne.

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Permalink: US crude oil inventories drop


June 13, 2006

Global oil inventories up

Filed under: Commodities, Oil, Economy

Oil inventories are at their highest level in over 20 years in the developed world, according to the International Energy Agency in a report on Tuesday. The reason for the increase in stockpiles, according to the agency, was high prices that are slowing down consumption. In consequence, the IEA has revised its prediction for demand growth around the world downward by 10,000 barrels per day to 1.24 million barrels per day. Still, according to an analyst at the Agency, the overflowing stockpiles - which have led to speculation that storage capacity is nearly all in use - do not mean an oil glut.

While demand was down in May in Europe and many parts of Asia, the world’s two biggest consumers of oil and oil products, the US and China, saw demand increase during the month. With oil demand at approximately 85 million barrels per day at present, 15 percent more than the daily average nearly a decade ago, larger stockpiles are said to be necessary in case of supply disruptions. Even with the higher inventories now, according to the IEA, oil stored in Organization of Economic Co-operation and Development nations would cover 54 days of demand, while the same amount would have covered 59 days of demand 8 years ago.

The new data on inventories from the IEA sent crude oil prices down during the day. July contract Brent crude on the International Petroleum Exchange was down $1.02 in early afternoon in London, to $67.91 per barrel. Meanwhile, West Texas Intermediate crude for July delivery was down 87 cents in early electronic trading, to $69.47 per barrel. The WTI decline was on top of a $1.27 decline on Monday.

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June 9, 2006

Gold prices lose 3.6 percent on week

Filed under: Commodities, Oil, Metals, Economy

Metals prices were down during the week as investors worried about what effect rising interest rates would have on demand for various commodities. Interest rates were raised in such diverse regions as the Eurozone, India, South Africa, Thailand, and Korea.

Among precious metals, gold dropped 3.6 percent over the week to $615.15 per troy ounce. Silver also declined, by 6 percent on the week to $11.38 per troy ounce, even though the government of Bolivia told miner Coeur D’Alene that it wouldn’t nationalize the company’s mine there, which is expected to produce 8 million ounces of silver every year, beginning in 2007. In addition, platinum lost 3.3 percent to $1,199 per troy ounce during the week, while palladium dropped 8 percent to $323 per troy ounce.

Base metals were down as well. Copper dropped 10.1 percent to $7,075 per tonne even though investors worried about short supply and increased demand. Nickel dropped 6.5 percent over the week to $20,000 per tonne, while lead fell by 1.9 percent to $1,010 per tonne on London Metal Exchange inventories that were at their most plentiful since December 2003. Aluminium was down 5.5 percent to $2,500 per tonne. Zinc, meanwhile, declined by 7.5 percent to $3,320 per tonne even after a prediction that supply shortages could last for at least the next ten years.

Crude oil prices rebounded after their fall on Thursday after the death of a key al-Qaeda leader was reported in Iraq. Concerns that attacks on Iraq’s infrastructure would continue, as well as weather worries, sent July contract Brent crude up $1.33 to $70.38 per barrel on the International Petroleum Exchange. West Texas Intermediate crude for July delivery added $1.20 to $71.55 per barrel on the New York Mercantile Exchange.

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Permalink: Gold prices lose 3.6 percent on week


June 8, 2006

Zarqawi death sends oil prices lower

Filed under: Commodities, Oil, Metals, Economy

The death of an al-Qaeda leader in Iraq led to a substantial decline in crude oil prices on Thursday. Abu Musab al-Zarqawi, who has led attacks on the oil infrastructure in Iraq since the downfall of the regime of Saddam Hussein that have seen oil production there drop to about 1.8 million barrels of oil per day, was killed in an air attack outside Baghdad. Most analysts assume that now that al Zarqawi is out of the picture, oil production will be able to increase in Iraq as attacks against facilities dwindle.

Brent crude July contracts dropped $1.16 to $69.35 per barrel late in the day on the International Petroleum Exchange in London, taking the week’s losses to 4 percent so far. Meanwhile, in late morning trade on the New York Mercantile Exchange, West Texas Intermediate crude had lost $1.42 to $69.35 per barrel, its lowest price in two weeks. WTI had already dropped $1.68 on Wednesday after the release of inventory data that showed increases in stockpiles of both crude oil and gasoline.

In other commodities, gold lost 3 percent after the European Central bank raised interest rates by 25 basis points, strengthening the dollar in relation to the euro. Gold was trading at $611.30 per troy ounce, $19 dollars from Wednesday’s late quote in New York. Silver was down as well, off 50 cents to $11.25 per troy ounce.

Prices for base metals were down, as well. Copper was down 5.5 percent to $7,355 per tonne on the London Metal Exchange, a drop of $450 dollars. Aluminium was down $140 to $2,510 per tonne, while lead dropped below $1,000 per tonne for the first time this year.

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June 7, 2006

Inventories up, crude oil lower

Filed under: Commodities, Oil, Metals, Economy

New inventories data that showed both crude oil and gasoline stockpiles up in the US in the week ending June 2 sent crude oil prices down on Wednesday as investors’ supply concerns eased somewhat. Crude oil inventories were up by 1.1 million barrels to a total of 346.6 million barrels as more crude oil was imported into the US and refineries did not process as much crude into petroleum products. Even though production was down, gasoline stockpiles added 1 million barrels on the week to a total of 210.3 million barrels on hand.

July contracts for Brent crude dropped by $1.26 to $69.55 per barrel on the International Petroleum Exchange in late afternoon trade in London. Meanwhile, West Texas Intermediate crude for July delivery had lost $1.45 to $71.05 in early afternoon trade on the New York Mercantile Exchange. In addition, Nymex July unleaded gasoline was down 4.38 cents to $2.1350 per gallon, while July heating oil was down 5.26 cents to $1.9900 per gallon.

Metals prices were mixed. Precious metals were down, with gold losing about $6 by late in the day in London to trade at $624.50/$625.50 per troy ounce after having dropped as low as $616.40 per troy ounce earlier in the day.

Base metals, however, saw gains on the day. Copper was up late in the day, rising more than $600 from its low of the day to trade at $7,855 on the London Metal Exchange. Most of the gain had to do with continuing concerns over short supply. Among other base metals, aluminium was up $57 dollars from Tuesday’s close and $100 higher than its low point in the day to $2,610 per tonne. Zinc was up $280 to $3,640 per tonne, while nickel was trading at $21,325 per tonne late in the day in London.

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