Commodity markets struggled this week, with Brent oil approaching a 17-month low, as traders balanced demand fears and the fragile economic outlook against China’s surprise interest rate cut.
Investor sentiment took a knock after the Bank of England, the European Central Bank and the US Federal Reserve poured cold water on the prospect of any additional stimulus measures to kick-start global growth.
“Macro fears, attitudes to risk and perceptions of the health of the global economy remain in the driver’s seat for now,” Barclays Capital analyst Sudakshina Unnikrishnan said. “Prices have been choppy and, at the end of the week, are well below the week’s highs.”
However, some commodities won a boost after the People’s Bank of China sprang a surprise interest-rate cut on Thursday to boost growth in the Asian powerhouse nation, which is a major consumer of many raw materials.
OIL: World oil prices fell sharply on Monday, plumbing new multi-month depths as the market was shaken by demand worries.
Brent oil tumbled to US$95.63 per barrel — the lowest level since Jan. 26 last year. New York crude slid to US$81.21 a barrel, which was last seen on Oct. 7 last year.
The market also fell as hopes dimmed for stimulus measures to re-energize the faltering US economy.
By late Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in July dropped to US$97.70 a barrel from US$98.43 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate, or light sweet crude, for July declined to US$82.86 from US$83.23.
PRECIOUS METALS: Gold fell in value but other precious metals eked out slender gains.
By late Friday on the London Bullion Market, gold reversed to US$1,576.50 an ounce from US$1,606 a week earlier.
Silver rose to US$28.17 an ounce from US$27.38.
On the London Platinum and Palladium Market, platinum increased to US$1,417 an ounce from US$1,407.
Palladium gained to US$613 an ounce, from US$607 an ounce.
BASE METALS: Aluminum, copper and nickel hit multi-month lows, but some prices finished the week in positive territory, boosted by the Chinese rate cut.
By late Friday on the London Metal Exchange, copper for delivery in three months fell to US$7,291 a tonne from US$7,363 a week earlier.
Three-month aluminum decreased to US$1,979 a tonne from US$1,983.
Three-month lead firmed to US$1,900.25 a tonne from US$1,900.
Three-month tin rose to US$19,699 a tonne from US$19,290.
Three-month nickel advanced to US$16,533 a tonne from US$16,174.
Three-month zinc gained to US$1,882 a tonne from US$1,875.