By Chris Flood
Published: February 25 2010 11:58 | Last updated: February 25 2010 11:58
Crude oil prices slipped below the $80-a-barrel mark on Thursday while base metals moved lower as risk appetite weakened amid fresh concerns over fiscal problems in the eurozone after Moody’s threatened to downgrade Greece’s sovereign debt.
Moody’s, the credit agency that currently has the highest rating on Greece, has also said that a downgrade is possible if the country’s fiscal plan is missed.
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In energy markets, Nymex April West Texas Intermediate slipped 44 cents to $79.56 a barrel while ICE April Brent lost 34 cents at $77.75 a barrel.
Tom Pawlicki of MF Global said oil prices responded positively to the “sizeable” increase in US petrol demand and small improvement in total demand shown by the latest US weekly inventories data, released on Wednesday.
“In the past few years, energy markets have been hypersensitive to any upticks in demand,” said Mr Pawlicki. “Overall, we view the (inventories) data as slightly positive for energy markets, but still not indicative of oil prices in the high-$70s.”
US weekly inventories data released on Wednesday showed crude stocks rose 3m barrels last week, above the consensus forecast for an increase of 2m barrels.
Imports of crude oil, which had been disrupted recently by bad weather in the Gulf, rose above the key 9m barrels a day mark, up 536,000 b/d to average 9.08m b/d last week.
Refinery activity picked up, with refinery utilisation rising 1.4 percentage points to 81.2 per cent.
Eugen Weinberg, commodities analyst at Commerzbank, said it was “questionable” whether refinery utilisation could continue to rise given that US inventories remained at high levels.
Gold held below the $1,100 level, trading at $1,092 a troy ounce after ending Wednesday’s session in New York at $1,096, moving in tandem with the dollar.
India imported just 459 tonnes of gold in 2009, the lowest level in13 years, according to the World Gold Council. This marked the first time that India’s gold imports had dropped below the mark of 500 tonnes since 1997.
There was a recovery in import demand as 2009 progressed and fourth-quarter imports were up 13 per cent compared with the same period in the previous year.
Sugar prices remained under pressure after a sharp correction at the start of the week, prompted by unexpected decisions by both Egypt and Pakistan not to buy fresh supplies because of high prices.
ICE March raw sugar fell 2.1 per cent to 24.58 cents a pound while Liffe May white sugar lost 1.1 per cent to $666.3 a tonne.
Base metals retreated, with copper down 1.2 per cent to $7,080 a tonne while aluminium fell 1.6 per cent to $2,103.5 a tonne and lead lost 2.2 per cent at $2,170 a tonne.
