FT: Oil on track for biggest weekly loss since 1991
Crude oil prices sank below the $42 a barrel level yesterday, a near-four year low, as commodity markets marked a new stage in their retreat, with US petrol prices falling below the $1 a gallon mark and copper dropping to the $3,000 a tonne level.
The huge fall in US employment in November, announced yesterday, underlined fears that the world's biggest economy was heading for a deep recession and prompted renewed selling pressure across commodity markets. Nymex January West Texas Intermediate fell to a low of $40.81 a barrel, its lowest level since January 2005, down 25 per cent this week.
WTI was on track for its largest weekly decline since January 1991, when the International Energy Agency released strategic stockpiles of oil after the US and its allies invaded Kuwait at the start of the first Iraq war.
Brent retreated below the $40 a barrel level for the first time since January 2005, touching a low of $39.50. ICE January Brent later traded $2.54 lower at $39.74 a barrel, down 25.7 per cent this week.
Merrill Lynch warned that oil could fall to $25 a barrel next year if the global recession affected China.
US wholesale petrol prices breached the $1 a gallon level this week. Nymex January RBOB unleaded gasoline lost 3.9 cents at $0.93 a gallon yesterday, down 23.1 per cent this week.
Copper sank to a low of $3,000 a tonne yesterday before recovering slightly to $3,060, down 6.4 per cent on the day and 15.5 per cent over the week. Aluminium was unable to hold the $1,500 a tonne level, sliding 6 per cent to $1,490 yesterday, down 15.9 per cent this week, under pressure from rising stock levels which have reached a 14-year high as demand from the construction and carmaker sectors has weakened.
Lead failed to hold the $1,000 a tonne level, down 1 per cent at $960 yesterday and dropping 12.7 per cent this week. Gold fell 2.8 per cent to $744 a troy ounce yesterday, down 8.8 per cent this week, under pressure from the sharp fall in oil prices and resilience of the dollar.
The Reuters-Jefferies CRB index, a global benchmark for commodity markets, dropped 3.1 per cent to 211.2 points, a six-year low.
