Commodity prices mostly fell this week as traders balanced weak Chinese data against signs that the US Federal Reserve could curtail its quantitative easing stimulus policy sooner rather than later.
Fed Chairman Ben Bernanke told US Congress on Wednesday that the US central bank could scale back stimulus measures soon if economic conditions improved.
However, he said any tapering off could only happen once it had confidence that economic gains could be sustained.
OIL: Brent oil prices sank to a three-week low at US$100.64 per barrel on Thursday on the back of poor Chinese economic data and Bernanke’s comments.
Banking giant HSBC Holdings PLC reported that manufacturing activity in China slowed this month for the first time in seven months, in a new sign of the weak recovery of the world’s No. 2 economy.
China’s purchasing managers’ index for the month came in at 49.6, from a final 50.4 last month. A reading above 50 indicates growth and anything below contraction.
Crude futures had fallen on Wednesday following the bearish US oil inventory report and Bernanke’s testimony.
However, US gasoline demand was expected to surge this weekend as the Memorial Day holiday tomorrow starts off the summer vacation driving season.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in July dropped to US$102.27 a barrel compared with US$104.47 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate, or light sweet crude, for July sank to US$93.91 a barrel from US$95.64 for the expired next month’s contract one week earlier.
PRECIOUS METALS: Gold hit one-month lows, but rebounded into positive territory on Bernanke’s remarks and as dealers sought shelter in the safe-haven precious metal.
By late Friday on the London Bullion Market, the price of gold rose to US$1,390.25 an ounce from US$1,368.75 a week earlier.
Silver eased to US$22.38 an ounce from US$22.52, while on the London Platinum and Palladium Market, platinum fell to US$1,455 an ounce from US$1,470 and palladium fell US$729 an ounce from US$736.
COFFEE: Arabica prices struck the lowest level since March 2008 on expectations of abundant supplies from Brazil, dealers said.
“The plentiful supply is continuing to weigh on prices,” Commerzbank analysts said in a note to clients. “The harvest has begun in Brazil and looks set to produce a record crop for a low-yield year.”
By Friday on NYBOT-ICE, Arabica for delivery in July slid to US$0.13040 a pound (0.45kg) from US$0.14050 a week earlier.
On LIFFE, Robusta for July dropped to US$1,978 a tonne from US$2,042.