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Commodity prices retreated around the globe as fears grew about the highly contagious swine flue .Crude oil prices fell. ICE June Brent was down $1.15 to $49.17 a barrel while Nymex June West Texas Intermediate dropped $1.30 to $48.84 a barrel.
“There is a risk that the flu scare will hit international aviation travel, which would have a negative impact on demand for jet fuel,” said Eugen Weinberg at Commerzbank.He added: “Current low oil prices will cause Opec to maintain current production constraints or take steps to cut back output even further, which supports our view that crude oil will trade at US$70 a barrel by the end of the year."
Soy rose $.03 cents to $10.07 a bushel, steadying only after dropped $.35 cents in yesterdays session.
Copper fell 2.4% to $4,205.50 despite a fall in 5,000 tonnes of stockpiles according to the London Metal Exchange (LME).
Tin lost 3.6%, falling to $11,860 a tonne.
Nickel fell 2.6% to $10,860 a tonne.
Gold dropped below its 900 level to a spot price of $898 a troy ounce.
James Steel of HSBC said the gold market had failed to react positively to news of the swine flu outbreak for two important reasons.
“First, investors flocked mainly into the dollar and other safe haven currencies, rather than into gold. The subsequent rally in the dollar weighed on gold prices.
The Arab League and South American countries will open Tuesday, their second summit with the purpose of boosting trade and cooperation. The idea of regular meetings between the 22 members of the Arab League and 12 South American countries was born in Brasilia in 2005, sponsored by Brazilian president Lula da Silva.
Although geographically very distant the two regions have long historic links in such areas as oil production (Venezuela and Saudi Arabia were five of the founding members of OPEC) and even migration: there’s a strong component of Arab descendants in South America. Sao Paulo for example is considered the second Syrian city of the world behind Damascus.The purpose of the regular summits which includes government officials and business representatives is not only closer trade links, possibly some form of association, but also political, with strong cooperation in the international arena, according to Brazilian sources.Click here to access the complete article from MercoPress
The China National Offshore Oil Corp., announced yesterday that it plans to invest $6.76 billion US dollars in developing oil fields and in exploring / securing rights to new sources of crude oil and natural gas.Investment figures are up about 18.9% according to the article published by Asia Pulse Pte Ltd yesterday, and accessible through this link to Rigzone."Seeking long-term increase in Chinese demand, the state-owned entity will continue with investment aimed at boosting its production capacity at a time when OPEC has reduced its own output.The pie is being divided as follows. Oil field development will be getting $4.38 billion of the total investment and exploration for new oil and gas fields will receive about $1.1 billion. So how to you decipher the meaning behind all this sudden spending? For starters, exploring for commodities when prices are as low as they are is quite risky. The reward can be potentially huge if legitimate and cost-effective discoveries are made, but new resources still take years to develop until they are extractable. China is therefore being smart about things. Allocating the majority of the investment towards developing fields that will start to produce oil so that when demand does pick up it won't be left scrambling for crude. Furthermore, if demand does not pick up and the global economy continues to slow, China will not have wasted too much of the investment in finding new resources that there is no demand for.
