Commodity markets were haunted by demand fears this week in the face of mounting global economic worries, with crude oil prices striking four-year lows and base metals also suffering heavy falls.
Markets around the world have been hammered by worries about the global economy as the eurozone, China and Japan struggle to reignite growth.
Those fears increased this week when data from the US, which has been the only economy showing signs of strength, came in well below expectations.
OIL: Brent hit a fresh four-year low after another sharp selloff in equities.
“This week global economic concerns worsened, with economic data indicating slowing growth in both China and the US — the world’s two largest oil consumers,” Inenco analyst Dorian Lucas said.
Brent sank on Thursday to US$82.60, while New York crude slid to US$79.78 per barrel, in the first drop below US$80 since June 2012. Both contracts have tumbled about one-quarter since hitting yearly highs in June.
“Oil fundamentals continue to remain bearish following adequate oil supplies in the US and Asia and serious lack of oil demand worldwide,” Sucden analyst Myrto Sokou said.
Adding to the pain is a supply glut caused by strong US shale production and a return of Libyan oil on to the market after facilities that were closed due to civil unrest resumed operations.
The market rebounded on Friday on bargain-buying, but analysts expect any gains to be limited, given the high level of crude supplies and dwindling demand.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in December had sunk to US$86.20 a barrel compared with last week’s US$89.85 for next month.
On the New York Mercantile Exchange, West Texas Intermediate, or light sweet crude, for next month recoiled to US$83.27 per barrel from US$85.68.
BASE METALS: Base or industrial metal prices mostly fell on intensifying anxiety over sliding global stock markets, weak demand and faltering world growth.
By Friday on the London Metal Exchange, copper for delivery in three months fell to US$6,615 a tonne from US$6,631.50 a week earlier, while three-month aluminium increased to US$1,962 a tonne from US$1,923.75.
Meanwhile, three-month lead fell to US$2,030 a tonne from US$2,059.25, as tin sank to US$19,426 from US$19,961, nickel fell to US$15,648 from US$16,462 and zinc decreased to US$2,245.75 from US$2,313.75.
COFFEE: The market pushed lower as some traders cashed in profits following sharp gains.
By Friday on ICE Futures US, arabica for December dipped to US$0.21320 a pound (0.45kg) from US$0.22080 a week earlier.
On LIFFE, London’s futures exchange, robusta for next month slipped to US$2,152 a tonne from US$2,186 a week earlier.
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