News // Markets & Stocks
Unforgettable Month for Commodity Markets
03 November 2008 , 10:18945
October proved an unforgettable month for commodity market investors for all the wrong reasons as mounting fears that the global economy was heading for recession generated widespread selling and unprecedented levels of volatility.
The Reuters-Jefferies CRB index was yesterday on course for a decline of almost 24 per cent in October, the worst monthly decline since this global benchmark for commodities was created in 1956.
Yesterday, US oil prices sank below the $65 a barrel level, heading for their largest monthly drop since crude oil futures started trading in New York in 1983.
Nymex December West Texas Intermediate fell $1.76 to $64.20 a barrel yesterday, flat over the week but on track for a decline of 36.2 per cent in October. ICE December Brent lost $2.11 to $61.60 a barrel, down 0.7 per cent this week.
UBS has chopped its oil price forecasts and expects WTI to average $60 a barrel next year compared with its previous projection of $105, followed by a modest recovery in 2010 with an average of $75, down from $117 previously.
"Oil markets seem to be pricing for a deep and long recession that will derail demand growth [for crude] this year and next," said Jan Stuart, economist at UBS.
October was the worst month for base metal prices for at least 37 years with the Reuters-CRB Industrials index down about 28 per cent.
Mounting evidence that Chinese demand for metals has slowed substantially this year has encouraged hedge funds to bet via "short positions" that prices will weaken. However, producers are cutting output in response to the weaker price environment and this resulted in a violent "short-covering" rebound for base metals in the early part of the week.
Nickel , with about 6.6 per cent of next year's planned output already mothballed, spiked 36.4 per cent between Monday and Wednesday before easing back to $12,150 a tonne yesterday, up 21.5 per cent this week.
Gold traded above the $700 level this week, taking its lead from swings in the dollar and equity markets. It dipped 1.4 per cent to $725 a troy ounce yesterday, down 1.1 per cent on the week.
18:00 21.03.2019NGV fuel becoming increasingly popular in Russia
16:08 21.03.2019Deputy Premier explains Belarus' position on EAEU gas transit rates
16:08 13.03.2019Georgia to increase Azerbaijani gas import
16:06 07.03.2019Rosneft aims at Asia’s oil market with trading unit
16:00 25.02.2019Goldman: Brent oil to reach $70-$75 soon
18:00 12.02.2019Ampelmann expands Russia presence with new Sakhalin office