AFP/London
World oil prices tumbled close to six-year lows last week, as record-high US crude inventories deepened worries over the global supply glut.
In another blow, official data showed Friday that the US economy slowed sharply in the fourth quarter of 2014, sparking fears over demand in the US, which is the world’s biggest oil consumer.
OIL: New York crude oil dived Thursday to $43.58 per barrel, striking a nadir last seen on March 12, 2009.
Prices plunged after official data showed Wednesday that US crude stockpiles surged by 8.9mn barrels to 406.7mn in the week to January 23.
The overall level of stockpiles was the highest since the US government began keeping weekly records in 1982.
Meanwhile, data showed Friday that US gross domestic product (GDP) grew at an annual rate of 2.6% in the fourth quarter. That marked a steep decline from the brisk 5.0% growth in the third quarter.
“Weaker than expected US GDP numbers reinforce the perception that we are seeing a little bit of a slowdown in the pace of the US recovery,” said CMC Markets analyst Michael Hewson.
“With oil storage at record levels this suggests that demand is likely to remain weak, and thus exert further limitations on the ability of the oil price to rebound, suggesting we could well see a gradual move towards the $40 level,” he warned.
In reaction to the US inventories data, meanwhile, WTI dropped $1.78 and Brent lost $1.13 on Wednesday.
Sucden analyst Myrto Sokou added that the weekly US energy report “indicated a prolonged deterioration in oil fundamentals” of supply and demand.
The oil market has lost more than half its value since June last year when crude was sitting at more than $100 a barrel due to a supply glut, boosted largely by robust US shale oil production, and weak global demand.
The problem was exacerbated in November after the Opec insisted that it would maintain output levels despite plunging prices. The 12-nation group pumps about 30% of global crude.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in March edged up to $49.65 a barrel from $49.55 one week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for March dipped to $45.35 a barrel compared with $46.91.
PRECIOUS METALS: Gold fell sharply as the European Central Bank’s recent stimulus announcement eclipsed the impact of the Greek election, analysts said.
“The recent softness can be explained by stronger appetite for riskier assets, notably European equities, following the announcement of bolder-than-expected easing by the ECB and the failure of the elections in Greece to trigger an immediate crisis there,” said Capital Economics analyst Julian Jessop.
Anti-austerity party Syriza won Greece’s elections last Sunday, sparking fears that the country could end up exiting the eurozone.
However, it could lift gold in the longer term, because the precious metal is regarded as a safe investment in times of geopolitical or economic turmoil.
“Whether or not Greece ultimately exits the euro, we expect the price of gold to be boosted further this year by the return of safe-haven demand as the country’s financial problems drag on,” Jessop added.
By Friday on the London Bullion Market, the price of gold slid to $1,260.25 an ounce from $1,294.75 a week earlier.
Silver sank to $16.92 an ounce from $18.23.
On the London Platinum and Palladium Market, platinum fell to $1,221 an ounce from $1,274.
Palladium advanced to $775 an ounce from $767.
BASE METALS: Copper slumped to $5,339.50 - the lowest level since July 22, 2009 - as worries intensified over the state of Chinese demand, dealers said.
“Pressure on copper prices from Chinese traders remains high,” said Commerzbank analysts.
“The selling pressure has doubtless been triggered by fears that financing transactions secured by copper may be wound up. Concerns about China’s economic slowdown are also likely to have played their part.”
By Friday on the London Metal Exchange, copper for delivery in three months slid to $5,468 a tonne from $5,559 the previous week.
Three-month aluminium rose to $1,863.50 a tonne from $1,835.50.
Three-month lead was unchanged at $1,845 per tonne.
Three-month tin declined to $19,250 a tonne from $19,440.
Three-month nickel firmed to $14,720 a tonne from $14,500.
COCOA: Cocoa futures hit a one-year low in New York and a one-month trough in London.
Sentiment was dented by global demand concerns for the commodity that is mostly used to make chocolate.
By Friday on LIFFE, London’s futures exchange, cocoa for delivery in March dropped to £1,917 a tonne from £1,939 a week earlier.
On the ICE Futures US exchange, cocoa for March slid to $2,707 a tonne from $2,794.
SUGAR: Prices were pushed lower by abundant global supplies.
“There appears to be plenty of sugar around in world markets, so there is no real good reason right now to expect major rallies in prices,” noted Price Futures Group analyst Jack Scoville.
By Friday on LIFFE, the price of a tonne of white sugar for delivery in March slid to $382.40 from $406.50 a week earlier.
On ICE Futures US, the price of unrefined sugar for March fell to 14.77 US cents a pound from 15.75 US cents.
COFFEE: New York prices slid to their weakest level since July 2014, rocked by forecasts of rainy weather in key producer Brazil.
“According to weather forecaster Somar Meteorologia, the Brazilian coffee growing areas look set to see their heaviest rainfall in 50 days at the beginning of February, which should significantly improve the growing conditions for this year’s crop,” said Commerzbank analysts.
By Friday on ICE Futures US, Arabica for delivery in March dropped to 159.40 US cents a pound from 160.35 cents a week earlier.
On LIFFE, Robusta for March decreased to $1,934 a tonne from $1,938.
RUBBER: Kuala Lumpur prices retreated due to weak oil prices and a lack of interest from buyers. Crude oil is used in the production of synthetic rubber.
The Malaysian Rubber Board’s benchmark SMR20 on Friday fell to 138.45 US cents a kilo from 140.60 US cents the previous week.
World oil prices tumbled close to six-year lows last week, as record-high US crude inventories deepened worries over the global supply glut.
World oil prices tumbled close to six-year lows last week, as record-high US crude inventories deepened worries over the global supply glut.
