Commodity prices slumped this week on increasing worries about the future of the eurozone, the possibility of a fresh recession in major economies and a Chinese manufacturing slowdown, analysts said.
Traders meanwhile reacted to news that the US’ Federal Open Market Committee left interest rates near zero percent.
OIL: Crude oil prices retreated because of weaker economic prospects in energy powerhouse China and debt-laden Europe, analysts said.
“Crude fell … as investors remained cautious about prospects for economic growth in Europe and China,” said Ker Chung Yang (郭宗揚), an analyst at Phillip Futures in Singapore.
Worries over the eurozone’s economic health as well as the moribund US economy also spilled over to China, which saw its manufacturing activity decline and foreign direct investment fall for the first time in 28 months.
China is the world’s largest energy consumer and a hit to its economy would have serious ramifications for the oil industry.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in February stood at US$103.95 a barrel compared with US$108.92 for next month’s expired contract a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for next month slid to US$94.01 a barrel from US$98.38.
PRECIOUS METALS: Prices slid, with gold striking the lowest level in three months.
By late Friday on the London Bullion Market, gold slid to US$1,594 an ounce from US$1,709 the previous week.
Silver dropped to US$29.78 an ounce from US$32.00.
On the London Platinum and Palladium Market, platinum fell to US$1,424 an ounce from US$1,496.
Palladium retreated to US$624 an ounce from US$670.
BASE METALS: Prices mostly retreated.
“The metals took a tumble as concerns over Europe escalated,” Fast Markets analyst William Adams said.
By late Friday on the London Metal Exchange, copper for delivery in three months slid to US$7,345 a tonne from US$7,750 the previous week.
Three-month aluminum dropped to US$2,008 a tonne from US$2,080.
Three-month tin retreated to US$18,775 a tonne from US$20,100.
Three-month zinc slipped to US$1,865 a tonne from US$1,992.
COCOA: Prices rebounded sharply on expectations of a supply deficit.
Cocoa hit the lowest level in more than three years on Monday, at ￡1,232 a tonne in London, because for a long time it had been expected that there would be excess supplies of the commodity next year.
Sentiment changed later in the week, with cocoa soaring to ￡1,482 a tonne, following a forecast that demand would outstrip supplies.
By Friday on LIFFE, London’s futures exchange, cocoa for delivery in March jumped to ￡1,399 a tonne from ￡1,337 a week earlier.
In New York on the NYBOT-ICE, cocoa for March gained to US$2,164 a tonne from US$2,082.
COFFEE: Coffee futures fell to a one-year low of US$0.216 a pound.
By Friday on LIFFE, Robusta for delivery in March stood at US$1,903 a tonne compared with US$1,924 for next month’s contract a week earlier.
On NYBOT-ICE, Arabica for March slipped to US$0.218 a pound from US$0.229.75.
RUBBER: Rubber prices fell on lower demand.
The Malaysian Rubber Board’s benchmark SMR20 slipped to US$0.331 a kilogram from US$0.340 the previous week.