Sun, Feb 17, 2013 - Page 6 News List

Commodity prices slip amid lunar holidays

AFP, LONDON

Customers are reflected in a mirror as they look at gold accessories at a gold store in Xuchang in China’s Henan Province on Friday. Gold prices fell further on Friday to hit a fresh six-month trough below US$1,600 at US$1,598.23, as a breach of key chart support levels triggered technically driven selling.

Photo: Reuters

Oil and metals prices retreated this week amid quiet trading owing to Asia’s Lunar New Year holiday celebrations, while dealers also paused for breath ahead of a key G20 meeting.

A billion-plus Asians have enjoyed a week of festivities to mark the Year of the Snake, dampening demand for raw materials in China, the world’s second biggest economy after the US.

OIL: Brent crude oil retreated from nine-month highs above US$119 a barrel reached a week ago on healthy economic data in the US and China — the world’s two biggest energy-consuming nations.

“Brent has been unable to achieve the nine-month high of a good US$119 per barrel it recorded last week,” Commerzbank analyst Carsten Fritsch said.

“The price has been stopped in its tracks by the International Energy Agency’s [IEA] unexpected downward revision of its demand forecast,” Fritsch said.

The IEA, representing oil consumers, trimmed its world oil demand forecast for this year on Wednesday.

It said the marginal cut of 85,000 barrels a day was in line with the prospect for a slowdown forecast by the IMF, which last month cut its world growth estimate for this year to 3.5 percent from 3.6 percent.

On Tuesday, OPEC raised its estimates for global oil demand this year, citing signs of a recovery in the global economy.

OPEC, which accounts for more than a third of global oil supplies, expects 89.68 million barrels of oil to be sold a day, up from 89.55 million estimated a month ago.

By Friday on London’s Intercontinental Exchange, Brent North Sea crude for April stood at US$117.69 a barrel compared with US$118.96 for the March contract the previous week.

On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for delivery in March rose to US$96.77 a barrel from US$96.15 a week earlier.

PRECIOUS METALS: The price of gold hit a six-month low point at US$1,598.23 an ounce on Friday, while palladium struck US$777 an ounce, the highest level in 17 months, amid falling production in South Africa.

Gold “prices have encountered a fragile floor in the absence of demand from China,” Barclays analyst Suki Cooper said.

Meanwhile global demand for gold fell last year in its first tumble since 2009 as demand in leading market India slid, narrowing the gap with second-biggest buyer China, the World Gold Council (WGC) said on Thursday.

Demand for the precious metal was 4,405.5 tonnes for the full year, down 3.85 percent from 4,582.3 tonnes a year earlier, the WGC report said.

However, in value terms, gold demand last year increased to a record high of US$236.4 billion, as the average price for the precious metal rose.

A decline in consumer demand offset an increase in demand from institutional investors and central banks, the report said.

For the full year, India’s gold demand fell 12 percent from a year earlier — despite improved demand in the final quarter — to 864.2 tonnes.

By late Friday on the London Bullion Market, gold dropped to US$1,612.25 an ounce from US$1,668.25 a week earlier.

Silver fell to US$30.18 an ounce from US$31.52.

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