Commodity prices dropped this week as the US dollar strengthened, with Brent oil sinking to its lowest level in more than two years against a backdrop of solid supplies and sluggish demand.
Meanwhile, sugar futures touched multiyear lows, weighed down by expectations of a large surplus of supplies.
OIL: Brent oil prices dived to US$96.72 on Thursday — touching a low point last seen in 2012 — while WTI hit a 16-month trough at US$90.43.
Photo: Reuters
Prices plumbed the latest depths after the International Energy Agency (IEA), which advises on energy policy to industrialized nations, cut its oil demand outlook, citing weaker economic growth in Europe and China.
The news followed broadly similar demand forecast downgrades this week from both the US government’s Energy Information Administration and OPEC.
The market hit a series of multimonth lows this week on the back of abundant global crude supplies and gloomy demand growth forecasts.
“Oil prices were lower again on ample supply and soft global demand,” CMC Markets analyst Jasper Lawler said.
The Paris-based IEA trimmed its estimate for oil demand this year to growth of 1 percent, or 900,000 barrels per day (bpd), from a previous estimate of 1.1 percent or 1 million bpd. That takes total demand for the year to 92.6 million bpd.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery next month had fallen to US$97.08 a barrel from US$101.29 one week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for October slid to US$92.65 per barrel compared with US$94.05.
PRECIOUS METALS: Gold dropped to an eight-month trough at US$1,228.13 an ounce on Friday as traders took their cue from the strong US dollar.
That also dragged sister metal silver to US$18.46, a level last seen in June last year.
“Gold and silver were seeing continuing declines on recent US dollar strength,” Lawler at CMC Markets said.
A stronger greenback makes dollar-priced gold and commodities more expensive for buyers using weaker currencies, denting demand and pushing prices lower.
By Friday on the London Bullion Market, the price of gold had slipped to US$1,231.50 per ounce from US$1,266 a week earlier.
Silver decreased to US$18.64 an ounce from US$19.13.
On the London Platinum and Palladium Market, platinum reversed to US$1,360 per ounce from US$1,406.
Palladium dipped to US$829 an ounce from US$887.
BASE METALS: Base or industrial metal prices fell across the board, as many traders cashed in recent gains.
By Friday on the London Metal Exchange, copper for delivery in three months had fallen to US$6,835.75 a tonne from US$6,932.75 a week earlier.
Three-month aluminum reversed to US$2,050.50 per tonne from US$2,098.
Three-month lead dipped to US$2,122 a tonne from US$2,209.25.
Three-month tin dropped to US$21,220 a tonne from US$21,390.
COCOA: Prices drifted lower in subdued trade.
By Friday on LIFFE, cocoa for delivery in December had dipped to £1,972 a tonne compared with £1,999 a week earlier.
On the ICE Futures US, cocoa for December dropped to US$3,038 a tonne from US$3,130 a week earlier.
COFFEE: Futures fell on the back of heavy selling and weak demand.
By Friday on ICE Futures US, arabica for delivery in December had fallen to US$1.845 a pound (0.45kg) compared with US$2.005 cents a week earlier.
On LIFFE, robusta for November reached US$1,988 per tonne compared with US$2,086 a week earlier.
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