OIL

In the New York market- crude oil futures rose on July 24, as tensions in Eastern Europe and the Middle East persisted. US crude’s gains outpaced Brent’s for most of the session, after a government report showing that US crude stocks fell by 4m barrels last week, but Brent caught up as traders covered short positions ahead of the close.

The US Energy Information Administration also reported crude oil inventories at Cushing, Oklahoma, the delivery point of the US crude contract, fell by 1.45m barrels. A build of 5m barrels in the combined inventories of gasoline and distillates and a 1pc decline in gasoline demand curbed price gains.

Meanwhile, gasoline futures hit a near-five-month low on indications that supplies are ample enough to meet demand through the rest of the busy summer-driving season.

Light, sweet crude for September delivery settled up 73 cents, or 0.7pc, at $103.12/barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange rose 70 cents, or 0.7pc, to $108.03/barrel.

U.S. crude-oil stockpiles fell by almost 4m barrels to 371.1m barrels in the week ended July 18, the US Energy Information Administration said. Analysts surveyed by The Wall Street Journal had expected supplies to fall by 2.5m barrels. This was the fourth weekly decline in a row, putting stockpiles at their lowest since March 7.

OPEC member countries exported 4.5mbpd of petroleum products in 2013, with the largest share devoted to Asian and Pacific countries (3.1mbpd or 68.5pc), the Organisation of the Petroleum Exporting Countries (OPEC) said its latest Annual Statistical Bulletin released.

The report noted that European and North American countries received smaller shares of OPEC petroleum product exports (0.6mbpd or 14.0pc and 0.2mbpd or 5.2pc, respectively).

The refinery capacity of OPEC member countries increased by a 4.9pc during 2013 compared to 2012. In 2013, OPEC Member Countries held 11.0pc of total world refinery capacity, up from 10.5pc in 2012.

OPEC countries remained important players in the natural gas market during 2013, with proven natural gas reserves of 95,034bn standard cubic meters. This marked a slight decrease of 0.1pc from 2012, with a total world share of 47.4pc.

However, the OPEC Reference Basket averaged at $105.87/barrel in 2013, down from $109.45/barrel in 2012. This represented a decrease of $3.58/barrel or 3.3pc with a volatility of $3.93/barrel or, equivalently, 3.7pc relative to the yearly average. The minimum monthly average crude price was $100.65/barrel in May 2013 and the maximum was $112.75/barrel in February 2013.

GOLD

Gold fell to the lowest level in a week as a rally in equities damped demand for an alternative investment amid concern that physical consumption is faltering. Gold for immediate delivery lost as much as 0.6pc to $1,296.36/ounce, on July 23, the lowest since July 16, before trading at $1,297.86 by 11:30 a.m. in Singapore,. The metal has retreated for three days, and is on course for the first back-to-back weekly drop since May.

Bullion sank 28pc last year on expectations the Federal Reserve will reduce stimulus. The .Standards & Poor 500 index rose to a record on July 24. Data showed gold consumption in China which surpassed India as the largest user last year, fell 19pc in the first half of 2014. The metal isn’t likely to get support from Indian demand as import restrictions remain unchanged, according to Commerzbank AG.

Goldman Sachs Group Inc. reiterated a call for gold to drop to $1,050 by the end of 2014 as the US economic recovery accelerates, analysts wrote in a report dated yesterday. The bank raised its long-term forecast 13pc to the marginal cost support level of $1,200 in 2014-dollar terms.

Gold has rebounded 8pc this year in part as tensions in Ukraine and the Middle East fueled haven demand. The price failed to advance on July 24, even as pro-Russian separatists shot down two Ukrainian fighter jets in the same eastern region where a Malaysian Air passenger jet was destroyed on July 17.

Copper

Copper dropped for the first time last week as investors viewed a rally to the highest price since July 14 as excessive amid rising global supplies. The contract for delivery in three months on the London Metal Exchange retreated 0.3pc to $7,150/metric tonne in Tokyo after gaining 1.8pc a day earlier, the most since May 12, and touching $7,175. The metal climbed 2.4pc this week.

Copper is down 2.8pc this year, the most among the six main metals on the LME. Global supply will exceed demand by 353,000 tonnes in 2014 and by 492,000 tones in 2015, according to Goldman Sachs Group Inc. Goldman cut its 12- month estimate for copper to $6,200/tonne from $6,600 due to rising output and exposure to a weak property market in China, the biggest user.

In the first four month of 2014, world usage is estimated to have increased by around 15pc compared with that in the same period of 2013, supported by strong apparent demand in China. Excluding China, world usage increased by around 4.5pc supported mainly by usage growth of 11pc in the EU and 15pc in Japan. However, comparative usage in the first four months of 2013 remained 5pc lower in the EU and 7pc lower in Japan than the first four months of 2012 level.

World mine production is estimated to have increased by around 4.5pc (265,000 t) in the first four months of 2014 compared with mine production in the same period of 2013. With the exception of Indonesia (-27pc) where production remained constrained by the ban on concentrates exports, all the other major copper mine producing countries had greater output. On a regional basis, production in the first four months of 2014 rose by 11pc in Africa, 4pc in Latin America, 13pc in North America and remained essentially unchanged in Asia, Europe and Oceania.

Published in Dawn, Economic & Business, July 28th, 2014