Finance Markets

May 19, 2006

Commodities prices lower on week

Filed under: Commodities, Oil, Metals, Economy

Commodities prices were down again on Friday. Some analysts blamed the lower prices on sell-offs by investors who were worried about where prices are headed after declines during the week.

Gold dropped 4 percent on the day and nearly 10 percent on the week to trade at $658.10/$658.40 per troy ounce in the late afternoon. Last Friday, gold reached a 26-year high at $730 per troy ounce. Elsewehre in precious metals, silver was trading at $12.11 per troy ounce during the day, almost 20 percent lower than late last week, when it hit a high of $15.17 per troy ounce.

Among base metals, copper lost 6 percent during the day to trade $500 dollars lower at $7,530 per tonne. It has lost 14 percent in the ten days since it hit a record high. Other base metals saw similar declines during the week.

Crude oil prices were down as well. Brent crude July contracts on the International Petroleum Exchange saw a decline of 95 cents to $68.72 per barrel late in the day after having seen gains earlier. It was down 5 per cent on the week, and it was the first time in five weeks that it has closed before $70 per barrel. Meanwhile, June contracts of West Texas Intermediate crude on the New York Mercantile Exchange had dropped 85 cents by early afternoon to $68.60 per barrel, around 9 percent lower than the record high it reached three weeks ago. The declines have come after increases in inventories in the United States.

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May 18, 2006

Oil slightly higher; metals decline

Filed under: Commodities, Oil, Metals, Economy

Crude oil prices were up slightly on Thursday as the big driving weekend of Memorial Day approaches at the end of the month. Prices at the pump are 75 cents per gallon higher than they were for last year’s holiday that marks the beginning of the summer driving season in the United States. The American Automobile Association has predicted that because of high gasoline prices, the rise in the number of Americans driving on the holiday will be the lowest in four years.

July contract Brent crude on the International Petroleum Exchange was up only 1 cent to $69.05 in late afternoon trade in London, but Brent traded in a wide range of $1.20 during the day. West Texas Intermediate crude June contracts were up 16 cents to $68.85 in early afternoon trade on the New York Mercantile Exchange, down more than 5 percent from its price at the beginning of the week.

Among precious metals, gold was down $8 after a sell-off late in the day, trading at $685.80/$683.60 per troy ounce.

Copper was also down on the day, losing $30 to $8,090 per tonne on the London Metal Exchange. The decline came after a report from the International Copper Study Group that showed a surplus of 52,000 tonnes of copper in February. Added to January’s surplus, the total surplus copper for the first two months of the year came to 117,000 tonnes, in contrast to a deficit of 55,000 tonnes for the same two months last year. Consumption for January and February this year was down 0.5 percent globally, according to the report, with Chinese consumption down 5.2 percent, EU usage down 4.7 percent, and US usage down 3.4 percent in the two months. Production was up in Australia, Congo, Peru, and Zambia, while it fell in Brazil, China, Indonesia, Kazakhstan, Mexico, and the US. Copper production in Chile remained unchanged.

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May 16, 2006

Commodities prices rebound

Filed under: Commodities, Oil, Metals, Economy

Crude oil prices were up on Tuesday after substantial declines on Monday. Brent crude June contracts dropped $2.65 on Monday but were back up 56 cents from Monday’s close in late trade on the International Petroleum Exchange to $70.23 per barrel. June contracts expire at the end of the trading day on Tuesday, so more attention became focused on July Brent contracts, which gained 87 cents to $71.05 per barrel. Meanwhile, West Texas Intermediate crude on the New York Mercantile Exchange saw June contracts add 89 cents to $70.30 per barrel. The gains come ahead of new US inventories numbers, due on Wednesday.

Precious metals were up as well. Gold added $8 to $688.90/$689.70 per troy ounce after dropping 4 percent on Monday. Silver was trading 25 cents higher at $13.40/$13.50, after losing 6 percent on Monday. Platinum, which lost less than other precious metals on Monday, added $23 to $1,293 per troy ounce on Tuesday.

Among base metals, copper added $220 to $8,410 after a 9 percent decline on Monday. It is back to within 5 percent of its record high price, reached on Thursday of last week. Part of the advance on the day were relaxed supply concerns after Grupo Mexico said it will not close its San Martin mine after all as striking miners have agreed to go back to work.

In other base metals, zinc was up $85 to $3,500 per tonne, while aluminium added $38 to $2,990 per tonne and nickel gained $450 to $20,450.

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May 11, 2006

Oil, metals continue rise

Filed under: Commodities, Oil, Metals, Economy

Supply concerns sent crude oil prices higher on Thursday. While Congress considered lifting import tariffs on ethanol in order to ease the pump price of gasoline, the Energy Information Administration said that such a move would only increase supplies by a little bit. June contract West Texas Intermediate crude on the New York Mercantile Exchange added $1.22 to $73.35 per barrel. Brent crude for June delivery on the International Petroleum Exchange was up 85 cents to $73.29 per barrel. Nymex unleaded gasoline for June was up 2.8 cents to $2.1975 per gallon.

In the metals markets, meanwhile, copper was up 6.2 percent to $8,575 per tonne, sliding back slightly after going as high as $8,790 per tonne earlier in the day, as inventories declined yet again in Europe and South Korea. In addition, Europe’s largest copper producer said that copper shortages were likely to continue.

Zinc hit a record $4,000 per tonne before falling back to $3,880 per tonne. Nickel added 3.7 percent to $21,200 per tonne on a decline in London Metal Exchange inventories of 594 tonnes. Aluminium gained 3.1 percent to $3,300 per tonne.

Among precious metals, gold was up 2.2 percent to $722.30 per troy ounce after going as high as $726.00 per troy ounce earlier in the day. Silver went as high as $15.17 per troy ounce before settling back to $14.93 per troy ounce. Platinum settled at $1,283 per troy ounce after hitting a new record of $1,293 per troy ounce during the day.

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May 8, 2006

Crude prices down after Iran letter

Filed under: Commodities, Oil, Metals, Economy

The price of crude oil fell significantly on Monday after the president of Iran sent a letter to US President George W. Bush asking that a solution be found to “the current situation in the world”, referring to the dispute over Iran‘s nuclear program. This unusual step led hedge funds to close out some of their speculative long positions, which caused oil prices to soar to record highs last week, according to a report from the Commodity Futures Trading Commission. Despite this latest development, however, the International Energy Agency expects prices to remain high for at least the next two or three years.

The price of West Texas Intermediate crude for June delivery dropped $1.50 to $68.69 per barrel on the New York Mercantile Exchange. June contracts for Brent crude on the International Petroleum Exchange were down $1.46 to $69.44 per barrel.

In the precious metals markets, gold was driven up and down, then up again in reaction to the drop in the price of oil as well as in response to current conditions in the currency markets. Gold was as high as $684.70 per troy ounce and as low as $670 per troy ounce before settling in at $676.80 per troy ounce. Silver was down 1.4 percent to $13.75 per troy ounce, while platinum added 0.4 percent to $1,183 per troy ounce after going as high as $1,089 earlier in the day.

In base metals, copper dropped 0.2 percent to $7,640 per tonne on an increase of 1,800 tonnes in London Metal Exchange inventories. Supply concerns were also eased by the news that a strike at the Lomas Bayas mine in Chile had been called off. Nickel was slightly lower at $19,450 per tonne and zinc dropped 1.7 percent to $3,390 per tonne. Both copper and zinc had hit new record highs on Friday.

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May 5, 2006

Copper up nine percent this week

Filed under: Commodities, Oil, Metals, Economy

Metals prices continued to rise on Friday, while crude oil prices rose a bit after having dropped substantially over the previous two sessions.

Among base metals, three-month aluminium on the London Metal Exchange added $55 for the day and was up more than 6 percent during the week to $2,930 per tonne after rising as high as $2,941 per tonne during the day. Zinc added $5 on Friday and over 8 percent during the week to $3,445 per tonne.

Copper , which has gained 70 percent since the beginning of the year, added another $15 on Friday to $7,647 per tonne as inventories slipped even further and Mexican and South American strikes interrupted supplies.

The gains this week came on low trade volumes due to holidays in Japan and China. Prices were also helped higher by comments from executives of miner BHP Billiton that suggested prices will stay high until global inventories become more plentiful.

Among precious metals, gold was up $2 on Friday and over 3 percent for the week to $678.40/$679.40 per troy ounce late in the day in Europe after going as high as $684.10 per troy ounce earlier in the session.

Silver held steady on Friday and added 20 cents during the week at $13.85/$13.95 per troy ounce. Silver prices were up and down during the week however, trading as high as $14 and as low as $12 at times.

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May 4, 2006

Copper prices up on supply warning; crude lower

Filed under: Commodities, Oil, Metals, Economy

Copper prices were up on Thursday after mining company BHP Billiton, the world’s largest, said that there would likely be a shortage of copper concentrate through the end of 2008. The shortages, it said, would be due to a number of factors, including equipment shortages, labour disputes, and rising demand. New mines and production facilities will not be online until that time. At the same time, the London Metal Exchange said that inventories of copper in its warehouses have dropped to just two days global demand, their lowest level since April 19.

All this news combined to raise three-month copper on the LME by $545 to $7,650 per tonne. The price was still a bit off its record high of $7,680 per tonne.

Gold was up to a new 25-year high of $677.40 per troy ounce during the day as investors anticipated a decision from the United Nations Security Council on a resolution concerning the current dispute with Iran over their nuclear ambitions. At midday in New York, spot gold was at $671.90 per troy ounce, up $4.90 on the previous day’s close.

Meanwhile, crude oil and gasoline were down sharply for a second day in a row after Wednesday’s US inventory figures showed unexpected increases over the previous week. West Texas Intermediate crude for June delivery on the New York Mercantile Exchange was down $2.38 to $69.90 per barrel, while Brent crude June contracts on the International Petroleum Exchange dropped $2.05 to $70.60. Nymex unleaded gasoline for June declined by almost 10 cents to $1.9870 per gallon.

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May 3, 2006

Crude oil declines on higher inventories

Filed under: Commodities, Oil, Metals, Economy

Crude oil and gasoline futures dropped significantly on Wednesday after the US Energy Information Administration released weekly figures showing that gasoline stockpiles were up by 2.1 million barrels in the week ending April 28. The numbers were surprising, as analysts had expected gasoline inventories to decline by 700,000 barrels during the week. Crude oil inventories were also up, by 1.7 million barrels, where a decline had also been expected.

June delivery West Texas Intermediate crude on the New York Mercantile Exchange was down $1.31 to $73.20 per barrel. Brent crude for June delivery declined by $1.10 to $73.54 per barrel on the International Petroleum Exchange. Nymex unleaded gasoline, meanwhile, dropped 5.8 cents to $2.1175 per gallon. It had traded as high as $2.1905 before the weekly inventory figures were released. The price declines came even though concerns about the Iranian situation were heightened by claims from Iran that it would attack Israel if the US takes what it called “evil” action against Iran’s nuclear development program.

Metals prices were slightly lower on the day, at least partly due to lower trading volumes due to holidays in China and Japan. Gold was down a bit to $666.80 per troy ounce despite trading as high as $676.30 earlier in the day. Platinum hit a record high of $1,184 per troy ounce but slid back to $1.175 later in the session. Palladium dropped by 1.3 percent to $375 per troy ounce. Meanwhile in base metals, copper dropped by 0.1 percent to $7,125 per tonne.

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May 2, 2006

Crude oil prices rise again

Filed under: Commodities, Oil, Metals, Economy

Crude oil prices were higher on Tuesday after Bolivia announced that it was taking control of foreign owned gas fields within its borders. This news, on top of a warning from Saudi Arabia’s oil minister that there would likely be more terrorist attacks on oil facilities in his country, increased worries that supplies would be disrupted despite the Saudi insistence that it is still committed to guaranteeing 1.5 million to 2 million barrels per day of spare capacity. Meanwhile, the deputy oil minister in Iran said that because short-term supplies cannot be increased, the price per barrel could reach $100, further escalating supply concerns.

Brent crude June contracts on the International Petroleum Exchange added 12 cents to $74.01 per barrel after reaching as high as $74.39 per barrel earlier in the day. West Texas Intermediate crude for June delivery went as high as $74.30 per barrel during the day before settling back to $74.10 per barrel, still 40 cents above Monday’s closing quote.

Meanwhile, in the precious metals markets, gold added 1 percent to $664.40 per troy ounce and silver was up 1.5 percent to $14.11. Gold’s rise was attributed mostly to the same tensions that are sending crude oil prices higher, while healthy demand for the new iShares silver exchange traded fund have sent silver prices higher. Base metals prices also were up, with copper rising 1.6 percent to $7,100 per tonne and zinc 0.8 percent higher to $3,207 per tonne.

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May 1, 2006

Gold, silver, crude oil all up

Filed under: Commodities, Oil, Metals, Economy

Precious metals and crude oil both saw price hikes on Monday to start off the new month.

Gold for immediate delivery added over 1 percent to $661.50 per troy ounce, yet another 25-year high, before easing back to $659.60/$660.60 per troy ounce in late morning New York trade, a gain of 25 percent since the beginning of the year. June delivery gold was up by 1.1 percent to $661.60 per troy ounce on Comex after having reached $664 per troy ounce earlier in the day.

July delivery silver added 34 cents to $13.95 per troy ounce on Comex, while immediate deliveries gained 1.9 percent to $13.98 per troy ounce. The price of silver is up more than 50 percent since the beginning of the year.

West Texas Intermediate crude on the New York Mercantile Exchange added 47 cents to $72.35 per barrel on the day, while Brent crude on the International Petroleum Exchange was up 79 cents to $72.81 per barrel. Prices were up not only on continuing concerns about the ongoing situations in Iran and Nigeria, but also after news of a refinery fire in Italy.

According the AAA, at the pump regular unleaded gasoline prices are averaging $2.919 per gallon in the US, 30 percent higher than they were a year ago but less than their peak in September of 2005. Nevertheless, prices in several states have gone above $3 per gallon.

Elsewhere, June heating oil was up 1.51 cents to $2.028 per gallon.

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April 27, 2006

Base metals, oil down

Filed under: Commodities, Oil, Metals, Economy

Base metals and oil saw prices decline on Thursday, while precious metals were generally up on the day. The declines in base metals were principally due to the news that China had raised interest rates, triggering worries that commodities demand could decline in that Asian nation. The worries, and the declines, came even though some analysts maintained that higher interest rates would benefit commodity prices and non-Chinese companies in the long run.

Copper dropped 1.6 percent to $7,180 per tonne although supplies concerns are high over inventories that have dropped to very low levels. In addition, workers at a mine in Chile were scheduled to vote during the day on whether or not to strike.

Nickel was down 0.9 percent to $19,375 per tonne, despite a drop of 504 tonnes of inventory in London Metal Exchange warehouses and worries loomed of a strike at a Canadian facility.

Aluminium was down 1.6 percent to $2,791 per tonne, affected by another move by the Chinese government, this one to reduce electricity subsidies, which is expected to force smaller commodities producers to consolidate.

Zinc was down as well, by 3.9 percent to $3,230 per tonne.

In precious metals, gold added 0.2 percent to $639.80 per troy ounce after going as low as $628.20 and as high as $643 during the day. Silver was up by 0.9 percent to $12.92 per troy ounce on the news that the new iShares silver exchange traded fund will begin trading on Friday on the American Stock Exchange. Meanwhile, platinum hit a new record as it added 1.2 percent to $1,147 per troy ounce. Palladium was nearly unchanged at $362 per troy ounce.

Elsewhere, crude oil dropped for the fourth day in a row. June contract Brent crude on the International Petroleum Exchange lost 90 cents to $71.19 per barrel. West Texas Intermediate crude for June delivery was down 78 cents to $71.15 per barrel.

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April 26, 2006

Oil down, most metals up

Filed under: Commodities, Oil, Metals, Economy

Crude oil prices were down after a US inventories report that showed crude oil stockpiles down by 200,000 barrels in the week ending April 21, approximately the drop that had been expected. Despite the decline, crude oil inventories are at the highest levels in 8 years. Gasoline inventories were also down, for the eighth week in a row, but only by 1.9 million barrels against an expected decline of 2.6 million barrels.

June delivery Brent crude contracts on the International Petroleum Exchange in London dropped $1 to $72.21 per barrel after the inventories report. West Texas Intermediate crude June contracts were down 93 cents to $71.95 per barrel on the New York Mercantile Exchange. Meanwhile, Nymex unleaded gasoline for May was less than 1 cent lower to $2.1200 per gallon.

With much of the current high gasoline pump prices in the United States being blamed on refining bottlenecks as refiners change over from MTBE blends to ethanol blends for the summer driving season, US President George W. Bush instructed the Environmental Protection Agency to issue waivers to allow states to continue to sell lower grades of gasoline to avoid shortages and resulting higher prices. However, so far only one state - Pennsylvania - has applied for a waiver, so it is uncertain how much of an effect the move will have on prices or supplies.

In metals markets, prices were mixed but most were up again.

Aluminium was up 1.5 percent to $2,835 per tonne on a report that stocks were down significantly in March. Meanwhile, three-month copper hit a new record of $7,380 per tonne despite a reported 500 tonne increase in inventories before slipping back to $7,280 per tonne. Zinc also hit a new record at $3,430 per tonne before dropping back to $3,365 per tonne later in the day.

Nickel was down 1.8 percent on the day to $19,650 per tonne, but only after achieving a new record high of $20,125 per tonne earlier in the session.

Among precious metals, gold added 1.4 percent to $638.50 per troy ounce. Platinum set another new record at $1,135 per troy ounce.

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April 25, 2006

Metals up again, oil down

Filed under: Commodities, Oil, Metals, Economy

Metals prices were on the rise again on Tuesday, with copper, nickel, and zinc all hitting new record highs on the day.

Three-month copper on the London Metal Exchange was as high as $7,230 per tonne during the day on news of a new miners’ strike, this time in Chile. Also contributing to the rise in price was the fact that inventories are down to just 2½ days at the current rate of global consumption. Later in the day, the price of copper slid back to $7,175, still a gain of 5.7 percent on the day.

In New York, meanwhile, copper trade on the COMEX was suspended for a quarter-hour when the benchmark copper contract was up to its 20-cent daily trading limit.

Nickel was up to $20,000 per tonne, a new record and a gain of 3.5 percent on the day. Helping the price up was the possibility of output disruptions at a facility in Canada where a labor contract expires in the middle of next month. There are also new predictions of a 10,000 tonne deficit in global supply this year.

Zinc added 3.6 percent on the day to $3,385 per tonne on a tight market.

Meanwhile, in precious metals, gold was up 1.4 percent to $629.80 per troy ounce.

Crude oil prices were up again early in the day due to new threats from Iran and data showing demand growing in China. However, prices slid after US President George W. Bush announced the suspension of oil deliveries to the Strategic Reserve in an effort to halt the rise in gasoline prices. Mr. Bush also asked the Environmental Protection Agency to relax pollution rules in order to ease gasoline shortages.

West Texas Intermediate crude for June delivery was up as high as $74.00 per barrel early in the session, but later was down $1 from Monday’s close to $72.33 per barrel. Meanwhile, June contract Brent crude was down 43 cents to $72.57 per barrel.

Nymex unleaded gasoline fell 6.4 cents to $2.11 per gallon even though the weekly US inventories report is expected to show stockpiles lower again.

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April 21, 2006

Crude oil at new record high

Filed under: Commodities, Oil, Economy

Crude oil prices were up again on Friday, with West Texas Intermediate crude for June delivery going as high as $75.35 per barrel on the New York Mercantile Exchange before ending the day up by $1.48 to $75.17 per barrel. This price was a new closing high and near inflation-adjusted records set in the late 1970s and early 1980s at around $80 per barrel.

While the average price for a gallon of gasoline topped $3 in New York, California, Hawaii, and Washington, D.C., the pump prices for gasoline in the US averaged $2.855 per gallon for regular unleaded, up 14 percent in the past month. There were isolated shortages at some locations on the East Coast, said to be due to a lag in the changeover to summer blends. These shortages are not expected to become serious or widespread.

Also to blame for the high oil prices were continuing problems in Iran and Nigeria. Iran’s president was quoted as saying that it will rely on domestically produced gasoline beginning in the fall. This was seen as a way to protect the nation against sanctions which have been sought by the US because Iran has not put its nuclear ambitions on hold. Iran claims that its nuclear program is civilian in nature, while the Bush Administration and other western governments suspect that its goal is to produce nuclear weapons. In Nigeria, meanwhile, militants have said that they will again begin attacking oil facilities and personnel if their demands are not met by April 25.

Adding to the unease for traders was a statement by Venezuelan President Hugo Chavez that oil could go as high as $100 per barrel if the United States were to attack Iran, as some reports say is under consideration.

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April 20, 2006

Crude prices, most metals down

Filed under: Commodities, Oil, Metals, Economy

Led by silver prices, most metals prices were down on Thursday in what analysts called a correction for the commodities market.

Silver prices dropped to as low as $12.61 per troy ounce before going back up to $12.75/$12.95, more than 13 percent lower than Wednesday’s close. The declines came after silver was up to $14.98, a 23-year high, earlier in the day.

Gold and platinum also hit highs before dropping back. Gold was up to $6.45.75 per troy ounce, then went as low as $608.50 before settling at $617.50/$618.30, a decline of 2.6 percent on the day. Platinum prices went up to an all-time high of $1,127/$1,131 before dropping back to $1,098/$1,106, $19 lower than Wednesday’s closing quote.

Copper dropped 1.5 percent to $6,296.50 after the Mexican government said that they La Caridad mine strike there was illegal, and after Grupo Mexico said that it has imported copper and zinc from South America to keep its smelters busy. Zinc prices fell as well, to $3,077.5, from Wednedsay’s record high price of $3,195.

Nickel bucked the trend and hit a record high of $18,950.

Crude oil prices hit new record peaks early in the day on reports of the bombing of an army barracks in Nigeria and threats of more attacks on facilities and individuals associated with the oil industry there. Also helping prices up were continuing concerns over output from Iran and drops in inventories reported by the United States on Wednesday.

Brent crude for June delivery went as high as $74.22 per barrel, while West Texas Intermediate on the New York Mercantile Exchange hit $72.49 per barrel for May contracts and $74.48 per barrel for June contracts. May contracts expire at the end of trade on Thursday.

Despite these increases, by midday in New York, May WTI contracts had lost 90 cents to $71.25 per barrel and June contracts had dropped 97 cents to $73.15. June delivery Brent fell back by 97 cents to $72.76.

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April 18, 2006

Oil, metals prices continue to rise

Filed under: Commodities, Oil, Metals, Economy

Prices for crude oil and metals were up again on Tuesday as concerns grew over Iran’s insistence that it will continue its nuclear program.

Brent crude June contracts hit a record high of $72.20 per barrel on the International Petroleum Exchange before falling back to $71.76 per barrel, a gain of 30 cents over the previous close. May delivery West Texas Intermediate trading on the New York Mercantile Exchange also reached a record price of $70.88 per barrel before the price fell back to $70.66 per barrel, 26 cents higher than yesterday’s close. With May WTI contracts expiring at the close of trade on Thursday, June contracts were up 22 cents to $72.22 per barrel after trading at $72.50 earlier in the session. September WTI went as high as $74.06 per barrel.

Gold traded at $618.25 per troy ounce during the day before retreating to $615.20, still a gain over yesterday’s New York quotes. Silver was also up over Monday’s prices to $13.54 per troy ounce. The rising price of silver, as well as higher petrochemical prices, caused Eastman Kodak to announce on Monday that it is raising prices on film.

Among base metals, three-month copper hit a record high $6,490 per tonne during the day as inventories continued to decline and traders worried about the possibility of disruptions in supplies due to strikes.

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April 17, 2006

Crude oil rises on supply worries

Filed under: Commodities, Oil, Economy

Crude oil prices were up again on Monday as Iran continued to insist that it will pursue its nuclear program and as worries persisted over supply issues in Nigeria in the wake of militant attacks on facilities there.

Brent crude for June delivery was up 16 cents to $70.85 per barrel after trading as high as $71.40 per barrel earlier in the day, a new record, during the day. May West Texas Intermediate crude on the New York Mercantile Exchange added 33 cents to $69.95 per barrel after going up to $70 per barrel during the session. June delivery WTI was even higher, trading at $71.25 per barrel. The US prices were the highest they have been since August 30 of last year in the wake of Hurricane Katrina.

An announcement by former Iranian president Rafsanjani, during a visit to Kuwait, that his nation intends to continue enriching uranium caused new concerns in the US and other western nations that Iran is determined to build a nuclear weapon. The comments are causing more concern after reports that the US is thinking about using tactical nuclear weapons to stop Iran’s nuclear work. Any conflict with Iran would cause disruption of the oil supply from the world’s fourth largest exporter.

Analysts are also concerned about the slowdown in output from Nigeria after recent attacks on facilities by militants. Production there is down by 500,000 barrels per day, and among affected companies Royal Dutch Shell said on Monday that it has still not assessed its offshore facilities in an effort to resume production. Also worrying are comments from OPEC that it is already producing at capacity and can do nothing more to make up for lost production in Nigeria, although the oil cartel insists that there is presently no supply shortage.

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April 13, 2006

Base metals, crude oil up; precious metals lower

Filed under: Commodities, Oil, Metals, Economy

Precious metals saw their prices decline on Thursday, but base metals reached new highs and crude oil headed up again on continuing worries about Iran and Nigeria.

Gold declined ahead of the long weekend, closing at $594.00/$594.80 per troy ounce in London. Profit-taking was responsible for the downturn in prices, but the declines were limited by rising oil prices and political concerns. Additionally, analysts still believe that the trend is toward higher gold prices that might even go beyond the 1980 high of $850 per troy ounce.

In other precious metals, silver dropped to $12.69/$12.72 per troy ounce and platinum was down to $1,077/$1,082 per troy ounce.

Copper added 0.7 percent to trade at a new record high of $6,145 per tonne on supply worries. Grupo Mexico said on Wednesday that while it could fulfill its April contracts for copper, it cannot guarantee supplies after that because of an ongoing strike at its La Caridad mine. Additionally, inventories in Lonton Metal Exchange warehouses were reported to be down by another 100 tonnes.

Zinc was up to a record $3,018 per tonne during the day before declining slightly to trade at $3,010 even though the London Metal Exchange reported that its zinc inventories had gone up by 8.6 thousand tonnes. However, total stockpiles were still at less than half that of a year ago, at 273,225 tonnes and are expected to decline further.

Crude oil prices were up on worries that supplies will become tighter as demand rises, especially in light of continuing uncertainties over supply problems in Nigeria, Russia, and some non-OPEC producers. The International Energy Agency said that in order to meet demand, OPEC will need to increase production this year. The continuing situation in Iran over its uranium enrichment program also contributed to the rise in prices.

Brent crude June contracts on the International Petroleum Exchange were up 36 cents to $70.22 per barrel. Brent reached a record $70.30 per barrel in earlier trade during the day. Meanwhile, May delivery West Texas Intermediate crude added 28 cents to $68.90 per barrel on the New York Mercantile Exchange.

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April 12, 2006

Crude oil stockpiles rise, gasoline inventories decline

Filed under: Commodities, Oil, Metals, Economy

New data from the US Energy Information Administration, released on Wednesday, showed that inventories of crude oil in the United States grew by 3.2 million barrels in the week ending April 7, when an increase of only 1.4 million barrels had been expected. Despite this, crude oil prices were up on the day after gasoline and heating oil inventories were down more than had been anticipated. Gasoline stockpiles dropped by 3.9 million barrels against an expected 2.4 million barrel decline, while heating oil inventories fell by 4.2 million barrels, also a larger drop than anticipated. These declines, coupled with concerns that demand will increase during the summer, sent prices up.

May contracts for Brent crude, which expired at the end of the trading day, added 20 cents to $69.57 per barrel. June contracts, which become the front contract tomorrow, were up 60 cents to $70.34 per barrel. West Texas Intermediate crude for May delivery added 17 cents to $69.15 per barrel. Nymex gasoline for May delivery was up 3 cents to $2.0840 per gallon, while Nymex May heating oil added 2.8 cents to $1.9830 per gallon.

Precious metals saw prices up yet again. Gold prices were up 0.6 percent on the day to $597.00 per troy ounce after once again trying to rise to the $600 level, with the Iran situation one reason for the increases. Silver gained 2.4 percent to $12.74 per troy ounce, while Platinum added 0.6 percent to $1,091.

New record high prices were set in base metals. Copper added 2.3 percent on the day to trade at $6,105 per tonne as supply concerns continued. Supply worries were also an issue in rising zinc prices. Three-month zinc gained 2.1 percent to $3,005 per tonne, a new record.

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April 10, 2006

Crude prices higher on politics; metals continue to rise

Filed under: Commodities, Oil, Metals, Economy

Published speculation over the weekend that the United States is thinking about a military move toward Iran helped send crude oil prices higher on Monday. European Union representatives, meanwhile, met during the day to consider less drastic measures - travel bans on Iranian officials and restrictions on what subjects Iranian students in Europe may study, for example - in response to Iran’s renewed nuclear program. Also affecting oil prices were new threats from Nigerian militants against oil facilities and workers there. Output from Nigerian facilities is still down by half a million barrels per day.

May delivery Brent crude prices on the International Petroleum Exchange were up 66 cents to $67.95 per barrel. Elsewhere, West Texas Intermediate crude May contracts gained 64 cents to $68.03 per barrel.

Uncertainties in Africa and the Middle East also pushed the price of gold higher, to $596.00 per troy ounce, as traders said that it was sure to rise above $600 per troy ounce soon. Analysts at Standard Bank said that a rise to $625 per troy ounce was inevitable.

Silver was at $12.42 per troy ounce during the day, up from Friday’s late New York price of $12.06/$12.09 per troy ounce.

In base metals, copper was up to $5,915 per tonne as inventories in London Metal Exchange registered warehouses fell to extremely low levels. Zinc found another new record high price at $2.915 per tonne, and aluminium was trading at $2,590 per tonne during the day.

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