By Chris Flood
Published: March 18 2010 12:21 | Last updated: March 18 2010 12:21
Crude oil prices fell on Thursday while base metals weakened but the sugar market managed a partial rebound after recent selling pressure.
Nymex April West Texas Intermediate lost 63 cents at $82.30 a barrel while ICE May Brent lost 64 cents at $81.32 a barrel.
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Opec’s agreement to maintain its current production quotas, announced on Wednesday, was widely expected.
Tom Pawlicki, analyst with MF Global, said the oil producers’ cartel “didn’t press very hard to increase compliance with current quotas even though many members are over-producing”.
Francisco Blanch, head of global commodities research at Bank of America Merrill Lynch, said: “Opec’s credibility is in doubt if it does not adjust its quotas to reflect actual production.”
Among the base metals, copper dipped 0.4 per cent to $7,518 a tonne while aluminium lost 0.2 per cent at $2,291 a tonne and lead fell 0.5 per cent to $2,255 a tonne.
Nickel, up 0.1 per cent at $22,375, bucked the weakness elsewhere amid concerns about supply disruptions after BHP Billiton announced the temporary closure of its Kwinana nickel refinery in Australia.
The refinery, which has an annual capacity of 65,000 tonnes, accounts for about 5 per cent of global nickel production. However, with nickel inventories held in London Metal Exchange warehouses near record levels at more than 158,000 tonnes, traders said the disruption at Kwinana would have only a limited impact on the market.
Sugar prices managed a partial rebound after touching an eight-month low in the previous session.
ICE May raw sugar rose 3.1 per cent to 18.89 cents a pound while Liffe May white sugar added 1.8 per cent at $531 a tonne.
Gold traded at $1,125 a troy ounce after ending Wednesday’s session in New York at $1,124.05.
James Steel, precious metals analyst at HSBC, said the gold market was finding support from disagreements between the US and China over trade and currency issues.
“With no resolution in sight to the currency and trade disagreements between the US and China and little else on the horizon to influence the bullion market, we believe that any gold price declines will be limited and that any deterioration in US-Sino relations is positive for gold prices,” said Mr Steel.
