Oil down, metals up

OIL fell this week on rising oil stockpiles and a stronger US dollar, with investors turning away from the June contract and buying into the July contract.

Singapore's Tapis was down from $US85.01 per barrel on Wednesday to $84.96/bbl last night.

The US Energy Information Administration reported that US crude stockpiles rose 1.9 million barrels while stockpiles at the Cushing terminal rose to a record 37MMbbl, the eighth straight increase in a row.

"Stockpiles are getting bigger, demand is not returning as hoped," MF Global vice-president Mike Fitzpatrick told AAP.

Matters were not helped by the International Energy Agency cutting its projection for global oil demand for 2010 by 220,000 barrels per day to 86.38MMbbl, though it noted this was still an increase over 2009.

The IEA cautioned that the global economy still faced a great deal of uncertainty due to the fallout from sovereign debt concerns in countries like Greece, despite robust demand from China.

Meanwhile, gold was the talk of the town for most of the week after the precious metal soared to an all-time high of $US1242.93 an ounce on the back of sovereign debt issues feeding safe haven demand.

UBS analyst Joe Battershall told Dow Jones Newswires that strong technical factors underpinned the gold price, although he believed there was no immediate trigger for a further spike.

"Gold is very, very technically driven and the charts look fantastic," he said.

Spot gold was trading at $1236.23/oz at time of writing.

After last week's falls, base metals gained some ground on the London Metal Exchange during the week.

Zinc led the commodities into the green, adding almost 3% overnight to close at $2160 per tonne, while copper added almost 2% to close at $7160/t and nickel inched 1% higher to $22,775/t.


Most read News

Most read News