18.08.2008 11:36

COMMODITIES: weekly review

Crude oil fell last week as a strengthening dollar curbed the appeal of commodities as a hedge against inflation. Oil has tumbled 23% from the record $147.27 a barrel reached on July 11. The global economic outlook led the Organization of Petroleum Exporting Countries to leave its forecast for 2009 oil demand growth unchanged today at the lowest rate in seven years. The 13-member group left the rate at 1.03% , the narrowest since 2002, even after raising its estimates of daily demand in 2008 and 2009 by 90,000 barrels.

Gasoline demand was down 2.1% in the first seven months of the year as record prices and slower economic growth cut consumer spending, the American Petroleum Institute said Aug. 13. Consumers spent more on gasoline than vehicles and parts for the first time in 26 years in May and June, as U.S. pump prices headed for a record. Crude oil for September delivery fell to $113.77 a barrel. Oil touched $111.34 a barrel, the lowest since May 1, and declined 1.2% last week. Brent crude for October settlement fell to $112.55 a barrel .

Gold fell below $800 an ounce, capping the biggest weekly slide in 25 years, as the dollar surged against the euro, reducing the appeal of the metal as an alternative investment. The metal plunged into a bear market this week, declining as much as 25% from a record $1,033.90 an ounce reached on March 17.Silver dropped as much as 14%. Silver is down 13%, and gold was the fourth biggest after dropping 5.5% . Silver, which has wider industrial applications than gold, has fallen 27% this month as commodities plunged on concern a global slowdown may cut demand for raw materials.

Copper may drop next week, extending the longest selloff in seven years, on speculation slowing economic growth and gains in the dollar will erode demand for the metal used in cars, homes and appliances. Copper for delivery in three months on the London Metal Exchange is down 1.5% this week, heading for the seventh straight weekly decline. Prices dropped for 11 consecutive weeks into mid-August 2001.
Among base metals over the week, copper dipped 0.5% to $7,365 a tonne and nickel rose 2.8% to $18,650 a tonne but aluminium lost 2.4% at $2,790 a tonne.