US crude sinks below $60 a barrel
By Esther Bintliff and Chris Flood
Published: November 7 2008 11:16 | Last updated: November 7 2008 22:33
Commodity markets remained under pressure this week amid ongoing concerns about the threat of a global economic recession and the weakening demand outlook for oil and metals.
US crude oil prices dipped below $60 a barrel on Friday for the first time since March 2007 but recovered after disappointing US employment data led to pressure on the dollar.
Nymex November West Texas Intermediate fell to a 20-month low of $59.97 a barrel but later recovered to close 27 cents higher at $61.04 a barrel, down 10 per cent this week.
ICE November Brent fell 8 cents to close at $57.35 a barrel on Friday, down 12.2 per cent this week.
Oil prices continued to fall even as the International Energy Agency warned that current global trends in energy supply and consumption were “patently unsustainable”. The energy watchdog said oil prices would rebound to more than $100 a barrel as soon as the global economy recovered.
Paul Horsnell, of Barclays Capital, said the oil market was in a state of “significant disequilibrium” and that there was no clear consensus on what price level would bring long-run demand and capacity into a sustainable balance.
Gold was fractionally weaker at $735 a troy ounce on Friday, up 1.6 per cent this week. Gold held above $700 throughout the week, taking its lead from movements in the dollar and equity markets.
Platinum rose 1.7 per cent to $837 a troy ounce, up 3 per cent on the week helped by renewed supply concerns after Anglo Platinum, the world’s largest producer, shut its Polokwane smelter after an accident. Initial reports suggested that about 200,000 ounces of platinum production, equivalent to 3 per cent of global supply, could be lost.
Amanda Lee, analyst at Deutsche Bank, said platinum prices were “oversold” and this latest accident illustrated the market’s fragile supply fundamentals.
Aluminium fell 3.4 per cent to $1,970 a tonne, under pressure from rising stock levels which, globally, have reached the highest level for 14 years at 3.7m tonnes, enough for almost five weeks of demand.
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is the worst stock market melt over? is stock market hit bottom?
