Oil price tumbled to 5-year low at 33.2 as OPEC reduced its forecast on 2009 consumption amid worsening economic outlook. Although the benchmark futures later rebounded and closed at 35.2, the black gold still lost 5.4% on daily basis. Today in Asian session, crude oil trades narrowly with a soft tone below 36.
OPEC published its January report yesterday. The cartel controlling 40% of oil supplies in the world reduced global economic growth to 1.3% from 1.5% projected last month. Economic outlook in OECD countries such as the US and Europe deteriorated sharply and recessionary concerns intensified while emerging markets such China has also experienced rapid decline in growth. As a proxy of economy, world oil demand is expected to be severely affected and OPEC forecast negative growth of 0.2M bpd in 2009. Demand for OPEC crude will also drop 1.4M bpd yoy to average at 29.5M bpd this year.
Gold price recovered to 820 after plunging to as low as 801.5 yesterday. As anticipated, the ECB announced a rate cut of 50 bps to 2% after the meeting yesterday, the news sent Euro down to as low as 1.3025. However, at the post-meeting press conference, Chairman Trichet commented that inflation rate in the medium-term is 'broadly balanced' and is 'inline with definition of price stability'. Moreover, the commented that the meeting in March will be much most important as by that time, more information will be available for evaluating the economic conditions. These seem to be signs that the central bank would like to give it a pause on monetary easing in February's meeting. Euro then rebounded to close at 1.3115 and trades at around 1.322 in Asian morning.
Platinum also recovered after losing for 4 days. On Thursday, the April contract plunged to 2 weeks' low at 908 alongside with declines in gold and other commodities and later rebounded strongly to close at 934.2. Today, the benchmark contract edges slightly higher to trade at around 950.
