Crude oil prices fell on Monday ahead of this week’s Opec meeting while base metals staged a broad retreat amid concerns that China might tighten monetary policy to prevent its economy from overheating.
In energy markets, Nymex April West Texas Intermediate lost 34 cents at $80.90 a barrel while ICE April Brent lost 36 cents at $79.03 a barrel.
Ahead of this week’s Opec meeting, traders played down the prospect of any supply changes by the oil producers’ group. Instead, the cartel of oil-producing countries is expected to reiterate a call for greater compliance with existing production quotas by its members.
Base metals moved lower with copper down 1.4 per cent to $7,355 a tonne, zinc lost 1.7 per cent at $2,300 a tonne, nickel down 1.7 per cent at $21.438 a tone, lead off 1.3 per cent at $2,230 a tonne and aluminium eased 0.9 per cent at $2,240.5.
Copper traders continued to monitor developments in Chile, the world’s largest producer, following the massive earthquake that affected the country two weeks ago and the huge aftershock last week.
Much of Chile was left without power supplies on Sunday evening after a transformer failed in the central electricity grid.
Traders are concerned that power supply problems could affect mining operations in the central region. Most of Chile’s copper is produced in the north, which was unaffected by the interruptions to power supplies.
Chile’s government has warned that the electricity supply grid remains fragile because of damage from the earthquake and Chileans have been asked to use less energy.
Gold traded at $1,108 a troy ounce this week, after ending Friday’s session in New York at $1,102.05, awaiting the outcome of this week’s meeting of the US Federal Reserve, which is expected to provide some more impetus to the dollar.
Some analysts think the US central bank will signal for the first time that it wants to prepare investors for a change in monetary policy by dropping the much-repeated phrase that interest rates would be kept low for “an extended period”.
