CM: Oil Nudges Up as German Factory Orders Gain, Gold Dips
Oil is up slightly in early morning trade, lifted partially by better-than-expected factory orders in Germany. Still, traders remain on their toes after finance ministers from the Group of 20 agreed that global economic recovery faces significant challenges.
Gold is weaker as many investors sold off the yellow metal to cover their losses in other markets, having reached its record high on May 14. Still, gold is expected to remain strong in the longer-term, with investors seen buying the metal on dips as it continues to hold its allure as a safe haven amid ongoing uncertainties about the euro zone's sovereign debt.
At 0755 ET, Brent crude is up 0.1% at $72.14 a barrel, while light sweet crude is down 0.1% at $71.46 a barrel, and natural gas is 1.1% weaker at $4.74 a million British thermal units.
Gold is down 0.2% at $1,215.60 an ounce, while silver is up 0.7% to $17.43 an ounce, and copper is down 1.2% at $2.79 a pound.
German orders in April rose 2.8% from the previous month, having gained 5.1% in March, according to the Economy Ministry. A slump in the euro's value due to persisting worries about Europe's sovereign debt made German exports cheaper and thus more competitive in overseas markets, and has led companies to hire more workers as well.
As for ongoing efforts to halt the well leak in the Gulf of Mexico, Coast Guard Admiral Thad Allen said that oil will linger in the waters at least until autumn as the government sends off more equipment to contain the spill. BP plc ( BP ) said it collected 10,500 barrels of oil Saturday, up from just over 6,000 barrels the previous day.
Australia's Arrow Energy Ltd ( AOE ) said that the possibility of a takeover by Royal Dutch Shell plc ( RDSA ) and PetroChina Co. ( PTR ) is looking more attractive as the industry faces the possibility of getting slapped with higher taxes from next year.
In the base metals market, Ricardo Alvarez Fuentes, general manager of privately held copper giant Codelco's (Corporacion Nacional del Cobre de Chile) El Teniente division, said that global copper demand may double in 15 years to about 36 million metric tons. Demand is seen rising by 4% this year, and rise to 4.7% in 2013, Alvarez Fuentes said.
