Sun, Mar 17, 2013 - Page 15 News List

Commodities mixed on fractured global demand

AFP, LONDON

Global commodity markets traded mixed this week as dealers reacted to global demand expectations for raw materials.

OIL: World crude prices diverged as traders seized on news of demand forecasts from major global energy organizations and reacted to positive US economic data.

Weighing on prices “are the demand forecasts of the three leading oil agencies,” Commerzbank analyst Carsten Fritsch said. “Without increased demand or a further cut in OPEC production, the global oil market will thus remain oversupplied, which may explain why oil prices have underperformed equity markets of late.”

The International Energy Agency this week eased its global forecast for growth in world oil demand for the second straight month, underscoring the effects of uncertainty from the US budget talks, sluggish Chinese business activity and unemployment in Europe.

The Paris-based agency estimated that demand for oil would total 90.6 million barrels a day this year, a cut of 60,000 barrels from its forecast last month.

OPEC on Tuesday stood pat on its crude demand forecast for the year, but raised its outlook for production growth by non-OPEC suppliers by 11 percent to 1 million barrels a day.

The cartel, which accounts for about 35 percent of global supply, expects global demand to be 89.7 million barrels per day this year, a rise of 0.8 million from last year.

The US Energy Information Agency on Tuesday lowered its forecast for the average West Texas Intermediate (WTI) and Brent prices this year.

By late Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in May stood at US$109.90 a barrel compared with US$110.03 for last month’s expired contract a week earlier.

On the New York Mercantile Exchange, WTI, or light sweet crude, for next month gained to US$93.48 a barrel from US$91.21.

PRECIOUS METALS: Precious metals rose across the board, with palladium and platinum boosted by higher car sales in China. The sister metals are used in the manufacture of catalytic converters.

Auto sales in China, the world’s top car market, rose in the first two months of the year, an industry group said, indicating strong demand as the country’s economy gradually recovers.

By late Friday on the London Bullion Market, the price of gold grew to US$1,595.50 an ounce from US$1,581.75 a week earlier, while silver gained to US$28.91 an ounce from US$28.78.

On the London Platinum and Palladium Market, platinum increased to US$1,593 an ounce from US$1,588 and palladium climbed to US$774 an ounce from US$769.

COCOA: Cocoa futures gained ground as traders bet that low prices would spark stronger demand.

By Friday on LIFFE, London’s futures exchange, cocoa for delivery in May rose to £1,443 a tonne from £1,404 a week earlier.

On New York’s NYBOT-ICE exchange, cocoa for May increased to US$2,140 a tonne from US$2,093.

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