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LONDON: Most commodity prices fell this week, buckling under pressure from poor US company results, weak economic data, demand worries and concerns over the impact of the eurozone debt crisis, analysts say.
Investor sentiment was hurt by a string of weak corporate reports from major US firms including Amazon, Google, IBM and McDonald’s. The world’s biggest maker of construction and mining equipment Caterpillar also cut its sales outlook for 2012, indicating a sharp slowdown in the fourth quarter and sparking oil demand fears.
“Commodity prices across the board mostly eased over the past week alongside other markets amid weak economic data, with the industrially-biased precious metals and base metals baring the brunt of the sell-off,” said Barclays Capital analyst Sudakshina Unnikrishnan.
OIL: Prices sank as news of surging US crude supplies and weak European economic data sparked fresh concerns over weak energy demand, traders said.
On Wednesday, London Brent had hit $106.80 a barrel — a nadir last seen in early August — and New York crude plunged to $84.94 to reach its lowest point since mid-July. “Oil prices dropped in the early part of the week with poor eurozone economic data and oil supply looking robust ... furthered by high gains in US crude stockpiles for the third week running,” said Inenco analyst Gary Hornby.
The US Department of Energy said crude oil supplies soared three times more than expected, by 5.9 million barrels in the week ended October 19.
Eurozone private sector business activity slumped deeper into the mire in October, falling at its fastest rate since June 2009 to 40-month lows, the closely watched Markit survey showed.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in December tumbled to $108.81 a barrel compared with $112.82 a week earlier. On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for December dived to $85.81 a barrel, from $92.08 for the expired November contract a week earlier.
PRECIOUS METALS: Prices fell on profit-taking and the stronger dollar, but gold losses were capped by safe-haven demand. Gold is widely considered a safe haven for investors in times of economic uncertainty.
By late Friday on the London Bullion Market, gold dipped to $1,716 an ounce from $1,737 a week earlier. Silver fell to $31.67 an ounce from $33.33. On the London Platinum and Palladium Market, platinum decreased to $1,572 an ounce from $1,633. Palladium reversed to $605 an ounce from $638.
BASE METALS: Most base or industrial metals dived to their lowest levels since early September. By late Friday on the London Metal Exchange, copper for delivery in three months decreased to $7,817 a tonne from $8,115 a week earlier.
Three-month aluminium fell to $1,936 a tonne from $1,997. Three-month lead dropped to $2,012 a tonne from $2,142. Three-month tin declined to $19,990 a tonne from $21,650. Three-month nickel slid to $16,180 a tonne from $17,080. Three-month zinc sank to $1,839 a tonne from $1,905.
COCOA: Prices fell on the back of poor demand for chocolate in Europe and the United States. “The fact that the National Confectioners Association envisages record spending on Halloween confectionery this year in the US is giving cocoa prices a boost, yet none of this can disguise the fact that demand in the traditional import countries in Europe and North America is currently unsatisfactory,” said Commerzbank analyst Carsten Fritsch.
By Friday on LIFFE, London’s futures exchange, cocoa for delivery in December fell to £1,547 a tonne from £1,608 a week earlier. On New York’s NYBOT-ICE exchange, cocoa for December declined to $2,391 a tonne from $2,483.
SUGAR: White sugar hit a new 26-month low at $523.90 a tonne on Wednesday, falling in line with most other commodities. By Friday on NYBOT-ICE, the price of unrefined sugar for March fell to 19.56 US cents a pound from 19.76 cents the previous week. On LIFFE, the price of a tonne of white sugar for delivery in December nonetheless increased to $531 from $539.50 a week earlier.
COFFEE: Coffee prices edged higher but gains were limited by plentiful supplies. By Friday on NYBOT-ICE, Arabica for delivery in December rose to 160.50 US cents a pound from 159.25 cents a week earlier. On LIFFE, Robusta for November firmed to $2,048 a tonne from $2,042.
GRAINS AND SOYA: Maize, wheat and soya prices diverged in subdued deals after the previous week’s gains. By Friday on the Chicago Board of Trade, maize for delivery in December dipped to $7.43 a bushel from $7.61 a week earlier. November-dated soyabean meal — used in animal feed — climbed to $15.58 a bushel from $15.34. Wheat for December firmed to $8.76 a bushel from $8.72.
RUBBER: Prices extended losses on concerns over the sluggish global economy and weak Chinese demand. The Malaysian Rubber Board’s benchmark SMR20 ended the week at 286.05 US cents a kilo, down from 293.55 cents the previous week.