Oil, metals lose ground

US oil prices slumped after the Organisation of Petroleum Exporting Countries said oil demand could weaken over the coming months as government stimulus packages are wound down.

It said demand for crude from its 12 members would average 28.65 million barrels per day, down 320,000bpd from 2009.

This figure is in line with a Platts survey of OPEC and oil industry officials and analysts, which found oil production from OPEC averaged 29.11MMbpd in August, down 110,000bpd from an estimated 29.22MMbpd in July.

Further pressure was put on oil prices after the US Energy Information Administration said in its weekly inventory report that US petroleum inventories had climbed to their highest level since 1990 last week.

Combined oil and fuel stocks rose 196,000bbl to 1.14 billion barrels, while supplies of crude oil and distillate fuel dropped unexpectedly.

"The headline numbers were supportive, so I understand why prices rallied immediately, but they masked a build in total inventories," Citi Futures Perspective analyst Tim Evans told Bloomberg. "There's still a big surplus."

Crude oil inventories dropped 1.85MMbbl, while distillate stocks shed 388,000bbl and gasoline supplies fell 243,000bbl.

Singapore's Tapis crude remained behind the curve, closing up US83c to $80.90.

Meanwhile, gold enjoyed a midweek spike before falling again overnight.

Comex gold closed at $1251.50 per ounce last Friday and climbed as high as $1259.30/oz on Tuesday.

Overnight the precious metal lost $6.60 to $1250.90/oz, while spot gold last traded at $1245.11/oz.

Most base metals also had a run this week, which was interrupted overnight on speculation Chinese authorities are investigating rubber market positions.

"The concern was that an investigation into the rubber market could lead into other markets," an unnamed trader told Dow Jones Newswires.

"Profit-taking was swift on the rumour and then stops, with momentum selling pushing prices lower."

The rumour proved to be unfounded, but the damage was done, with copper losing 1.5% to $7540.75 per tonne.

Nickel fell 0.6% to $22,744/t, but this week saw the metal rise to above $22,000/t for the first time in a month.


Most read News

Most read News