By Chris Flood
Published: March 19 2010 12:02 | Last updated: March 19 2010 12:02
Crude oil prices fell on Friday while gold prices slipped but the sugar market continued to recover.
In energy markets, Nymex April West Texas Intermediate lost 70 cents at $81.50 a barrel, while ICE May Brent lost 78 cents at $80.70 a barrel.
Following this week’s meeting at which Opec agreed to maintain its current production quotas, analysts at Deutsche Bank said that what was left unsaid by the oil producers’ cartel was what level of prices might be seen as “too high” and a threat to recovery in the global economy.
“If oil prices continue to move strongly upward, it may raise a paradox concerning the impact this would have on the outlook for the [global] economy,” said Adam Sieminski, chief energy economist at Deutsche Bank.
He added that monetary tightening measures in China and a strengthening US dollar had challenged the euphoria surrounding the commodities complex at the end of last year.
Deutsche Bank said the next test for the commodities sector, and specifically industrial metals, would be a slowdown in Chinese fixed asset investment and loan growth.
“This development could also provide a challenge for the oil markets,” said Mr Sieminski.
Gold traded at $1,120 a troy ounce after ending Wednesday’s session in New York at $1,125.45, under pressure as the dollar strengthened against the euro amid tensions over the need for a rescue package for Greece.
“It seems that officials at both the IMF and the EU can’t decide, leaving Greece looking like a tennis ball that’s being batted to and fro,” said Steve Barrow, currency strategist at Standard Bank. “Both suggest that they are willing to help but the truth seems to be that each hopes the Greek ball is over the other side of the net when the game finishes.”
The sugar market continued its recovery for a second session with ICE May raw sugar up 1.6 per cent to 19.31 cents a pound while Liffe May white sugar added 1.4 per cent at $540.2 a tonne.
