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| July 21, 2003 | Monday | Jumadi-ul-Awwal 20, 1424 |
World commodity report
The International Energy Agency (IEA) predicts demand for oil to grow 1.3 per cent to 79.08 million barrels a day in 2004 in response to lower prices and an expected economic recovery.
It added that output from producers outside the Organization of Petroleum Exporting Countries (Opec) should increase by 1.32 million barrels a day in 2004 after an increase of 1.11 per cent this year.
Oil stocks held by the 30 industrialised members of the Organisation for Economic Cooperation and Development were up by 12 million barrels at the end of May compared to April but were down 164 million from May last year.
The IEA said crude oil prices continued to rebound in June, “supported by lower Opec crude output, the slow return of Iraqi production, fears of further supply disruptions in Nigeria and political issues with Iran.”
But it added that “fears of a substantial surge in gasoline prices later this summer have eased.” The IEA also predicted that Opec members could sustain a loss of overall market share in 2004 for the fifth straight year.
Oil prices have risen in recent days to levels not seen for almost four months on worries about tight gasoline supplies and a tropical storm in the Gulf of Mexico.
By July 11, the price of benchmark Brent North Sea crude oil for August delivery had climbed to $29.26 a barrel in London from $27.67 a week earlier.
Aluminium prices have risen in recent weeks coinciding with Alcan’s bid for Pechiney, the French aluminium group. Analysts welcome industry consolidation as it may lead to tighter controls on production. Meanwhile, Russian Aluminium the world’s second largest aluminium producer, announced a $700 million expansion of its Sayanogorsk smelter.
The three month aluminium price on the London Metal Exchange rose $20 to $1394 a tonne on July 8. Global aluminium production has been affected recently by the strong rise in the price of alumina, which is used to make aluminium.
By July 11, three month aluminium price gained to $1410 per tonne from $1372 the previous week.
In the first week of July, cocoa prices gained on worries that the crop in war torn Ivory Coast, the world’s biggest producer, maybe smaller than previously expected. Concern about a potential lowering of the 2003-04 crop size combined with worries that smaller beans in Indonesia would rip the harvest these has encouraged the buying.
On LIFFE, London’s financial futures exchange, the price of cocoa for September delivery firmed to #1026 a tonne in the week ended July 3, from #994 the previous week. On the CSCE, the New York futures market, the September contract rose to $1647 per tonne from $1577.
On LIFFE, the price of cocoa for September delivery dropped to #984 a tonne on July 10 from 1026 pound the previous week. On the CSCE, the September contract fell to $1529 per tonne from $1647.
Meanwhile, coffee prices edged lower in the absence of much fundamental news or sign of frosts in Brazilian producer regions, analysts said. Weather conditions in Brazil remain benign, with no threat of frost to July 16, and even after that a forecast report of colder weather suggests that front will drift off to sea.
That there remains another couple of weeks of potential for cold weather in Brazil will continue to provide support, but as the timeframe constricts there will be those ready to sell the market short on abundant supply and the failure of any frost to develop.
On LIFFE, Robusta quality for September delivery eased to $693 per tonne from $712 the previous week. On New York, CSCE market, Arabica for September delivery slipped to 61.65 cents a pound from 62.55 cents the previous week.
Gold has fallen in the recent days in Europe, as pressure from a tumbling euro set off a short flurry of selling of the safe haven asset, dealers said.
Volumes were thin, with little input from the Unites States due to a slow start after the July 4 Independence Day holiday.
After edging up in Asian trade to over $351 an ounce, spot gold gave into the weaker single currency, which dulls the dollar-dominated metal’s attraction as an alternative investment for European investors.
Bullion slipped below support at $350 early in European activity, before going on to score a low at $347.65 when limited selling from funds kicked in.
A mixed picture of the US economy continued to emerge in the first week of July, with dismal payroll figures contrasting with a surprisingly strong report on the US service sector, leaving investors confused over whether the world’s biggest economy is on the mend.
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