Oil market sinks as US inventories expand


Sun, Oct 27, 2013 - Page 15

World oil prices dived to multi-month lows this week, weighed down by abundant stockpiles in top consumer the US, dealers said, while coffee futures slumped to their lowest levels in four-and-a-half years as traders eyed the prospect of bumper harvests from top producers Brazil and Vietnam.

On the upside, precious metals won some support as the greenback hit a two-year low against the euro, with poor non-farm payrolls data raising expectations that the US Federal Reserve would keep its stimulus program in place.

However, base metals were pushed lower as nervous traders eyed strains in China’s interbank market that could hurt demand.

OIL: The crude oil market hit a series of low points as rising US reserves stoked demand worries.

New York crude plunged on Thursday, striking a low of US$95.95 per barrel last seen on June 28, while London Brent oil sank on Friday to US$106.52 a barrel, touching a level last recorded on Aug. 9.

“Prices came under pressure from growing US oil stockpiles,” Inenco analyst Lucy Sidebotham said.

The US Department of Energy on Monday said that US crude reserves had soared by 5.2 million barrels in the week ending on Oct. 18.

By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in December slid to US$106.62 per barrel from US$109.60.

On the New York Mercantile Exchange, West Texas Intermediate, or light sweet crude, for December slid to US$97.54 a barrel from US$101.02 for this month’s contract a week earlier.

PRECIOUS METALS: Gold hit a one-month peak of US$1,352.05 per ounce on Thursday, dragging sister metal silver to a five-week pinnacle at US$22.88 per ounce.

By late on Friday on the London Bullion Market, the price of gold rallied to US$1,347.75 an ounce from US$1,316.50 a week earlier, while silver advanced to US$22.35 an ounce from US$21.87.

On the London Platinum and Palladium Market, platinum gained to US$1,440 an ounce from US$1,438 and palladium eased to US$733 an ounce from US$737.

COFFEE: Arabica fell on Thursday to US$0.10950 per pound (0.45kg) the lowest level since March 2009, while Robusta hit US$1,562, which was last touched in June 2010.

By Friday on the ICE Futures US exchange in New York, Arabica for delivery in December had dipped to US$0.11060 a pound from US$0.11460 a week earlier.

On LIFFE, London’s futures exchange, Robusta for January sank to US$1,582 a tonne from US$1,638 a week earlier.