Raw Materials Rally Extends on Economic Hopes
SINGAPORE - Oil bubbled along around its highest in seven months, while copper hit an eight-month peak on Wednesday as commodity markets continued their advance, spurred by a softer dollar and hopes for economic recovery.
Crude oil touched $71.18 a barrel, copper eyed $5,200 a tonne and gold crept back towards $1,000 an ounce as the dollar traded around $1.41 versus the euro.
Oil has more than doubled since the low $30s hit this winter and copper has gained around 70 percent from its lows on optimism of an economic recovery that would lead to higher demand, although prices are still well below a record highs of $147 for oil and $8,940 for copper touched last July.
U.S. light crude for July delivery rose 1.5 percent to $71.03 a barrel by 0659 GMT, off its earlier high after ending Tuesday at $70.01, the first settlement above $70 in seven months.
The American Petroleum Institute (API) reported a deep fall of 6 million barrels in U.S. crude stocks in the week ended June 5, beating analysts’ expectations for a 400,000-barrel draw, and steady products inventories versus forecast builds.
“The stats are another sign that we may have reached bottom. Relatively speaking, it seems that things are getting better and it should be bullish from there,” said Tony Nunan, risk manager at Mitsubishi Corp in Tokyo.
Prices could gain further on Wednesday if the EIA confirms the API’s fall in crude inventories, in its own data on Wednesday to be released at 1430 GMT.
Inventories are also underpinning copper and soy.
London Metal Exchange stocks of the metal have fallen 45 percent since peaking in February, and soybean stocks are declining too. U.S. soy stocks at the end of the marketing year on Aug. 31 are forecast to dip to a five-year low of 130 million bushels.
The U.S. Depratment of Agriculture will update its estimate of soy stocks at 1230 GMT. Three-month LME copper rose 1.6 percent to $5,250 a tonne, its highest in nearly eight months.
“The global market has expectations of rising oil prices, improving economy and inflation, which have pushed up metals,” said a Shanghai-based trader, adding that London copper was likely to trade at high levels around $5,250-$5,300 a tonne in the short term.
“But afterwards, copper prices are likely to experience a downward correction in the next few months. A rise will be reasonable when consumption improves in September and October.”
Even aluminium, which has a 4.3 million-tonne inventory albatross around its neck, has jumped 17 percent so far this month and is on course for its biggest monthly rise since May 1988 when prices jumped 20 percent.
LME aluminium rose 1.2 percent to $1,665 since early December.
“In China, the real estate market has improved and the automobile sector is also doing well, sending positive signals on aluminium consumption,” said Liu Xu, an analyst with China International Futures in Shenzhen.
However, stockpiles of the lightweight metal in LME warehouses remain at a record 4.28 million tonnes, having surged almost four-fold since September last year. U.S. soybean futures held near Tuesday’s nine-month high, with grains steady ahead of a global demand and supply outlook report to be issued by the USDA.
“I don’t think any big movement will be taking place before the report,” said Genichiro Higaki, head of the proprietary fund management team at Sumitomo Corp in Tokyo.
“Speculators have already bought quite a bit, especially soybeans, and now we do need some additional factor for them to buy more. Any kind of weather scare is the biggest one.”
Chicago Board of Trade July soybeans fell 0.3 percent to $12.40 after rising 11 cents on Tuesday.
Spot gold rose to $957.90 per ounce, about half a percent higher than New York’s notional close of $953.75.
Crude oil touched $71.18 a barrel, copper eyed $5,200 a tonne and gold crept back towards $1,000 an ounce as the dollar traded around $1.41 versus the euro.
Oil has more than doubled since the low $30s hit this winter and copper has gained around 70 percent from its lows on optimism of an economic recovery that would lead to higher demand, although prices are still well below a record highs of $147 for oil and $8,940 for copper touched last July.
U.S. light crude for July delivery rose 1.5 percent to $71.03 a barrel by 0659 GMT, off its earlier high after ending Tuesday at $70.01, the first settlement above $70 in seven months.
The American Petroleum Institute (API) reported a deep fall of 6 million barrels in U.S. crude stocks in the week ended June 5, beating analysts’ expectations for a 400,000-barrel draw, and steady products inventories versus forecast builds.
“The stats are another sign that we may have reached bottom. Relatively speaking, it seems that things are getting better and it should be bullish from there,” said Tony Nunan, risk manager at Mitsubishi Corp in Tokyo.
Prices could gain further on Wednesday if the EIA confirms the API’s fall in crude inventories, in its own data on Wednesday to be released at 1430 GMT.
Inventories are also underpinning copper and soy.
London Metal Exchange stocks of the metal have fallen 45 percent since peaking in February, and soybean stocks are declining too. U.S. soy stocks at the end of the marketing year on Aug. 31 are forecast to dip to a five-year low of 130 million bushels.
The U.S. Depratment of Agriculture will update its estimate of soy stocks at 1230 GMT. Three-month LME copper rose 1.6 percent to $5,250 a tonne, its highest in nearly eight months.
“The global market has expectations of rising oil prices, improving economy and inflation, which have pushed up metals,” said a Shanghai-based trader, adding that London copper was likely to trade at high levels around $5,250-$5,300 a tonne in the short term.
“But afterwards, copper prices are likely to experience a downward correction in the next few months. A rise will be reasonable when consumption improves in September and October.”
Even aluminium, which has a 4.3 million-tonne inventory albatross around its neck, has jumped 17 percent so far this month and is on course for its biggest monthly rise since May 1988 when prices jumped 20 percent.
LME aluminium rose 1.2 percent to $1,665 since early December.
“In China, the real estate market has improved and the automobile sector is also doing well, sending positive signals on aluminium consumption,” said Liu Xu, an analyst with China International Futures in Shenzhen.
However, stockpiles of the lightweight metal in LME warehouses remain at a record 4.28 million tonnes, having surged almost four-fold since September last year. U.S. soybean futures held near Tuesday’s nine-month high, with grains steady ahead of a global demand and supply outlook report to be issued by the USDA.
“I don’t think any big movement will be taking place before the report,” said Genichiro Higaki, head of the proprietary fund management team at Sumitomo Corp in Tokyo.
“Speculators have already bought quite a bit, especially soybeans, and now we do need some additional factor for them to buy more. Any kind of weather scare is the biggest one.”
Chicago Board of Trade July soybeans fell 0.3 percent to $12.40 after rising 11 cents on Tuesday.
Spot gold rose to $957.90 per ounce, about half a percent higher than New York’s notional close of $953.75.
quoted from: Khaleej Times
