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Monthly Archives: September 2011

Copper Set for Longest Losing Streak Since '08

Copper Set for Longest Losing Streak Since '08

By Bloomberg News

Copper fell for a seventh day, the longest losing streak since December 2008, on worries that a failure to contain Europe’s sovereign-debt crisis may lead to a slump in demand. Lead, nickel and tin also dropped.

Three-month delivery copper on the London Metal Exchange fell as much as 2.3 percent to $7,170 a metric ton and traded at $7,184.75 at 1:26 p.m. Shanghai time. The contract tumbled to a 13-month low on Sept. 23 and lost 15 percent last week.

U.S. Treasury Secretary Timothy F. Geithner called on governments to unite with the European Central Bank to beef-up the capacity of their 440 billion-euro ($594 billion) bailout fund, warning failure to act threatened “cascading default, bank runs and catastrophic risk.”

“Copper is clearly in a downward trend, as investors see no improvement in the macro environment, only deterioration,”Zhang Zhenghua, an analyst at Minmetals Futures Co., said today by phone from Shanghai.

Commodities fell to a nine-month low on Sept. 23, with the Standard & Poor’s GSCI Index of 24 of energy, metal and agriculture prices declining 1.4 percent. The measure slumped 8.3 percent last week, the most in four months, and has tumbled 21 percent since touching a 32-month high in April.

The metal for November delivery on the Shanghai Futures Exchange fell 2.8 percent to 55,370 yuan ($8,671) a ton, sliding for a sixth consecutive day, after tumbling 14 percent last week.

Significant Risk

Copper has the most significant “fundamental” risk of declining out of the industrial metals because prices are well above the marginal cost of production, Macquarie Group Ltd. said in a report today.

Speculators were their most bearish on copper since July 2009, as managed-money funds held net-short positions in copper, or wagers on falling prices, totaling 6,672 futures and options contracts as of Sept. 20, data from the U.S. Commodity Futures Trading Commission compiled by Bloomberg showed. The measure showed net-long positions a week earlier of 300 futures and options contracts, betting on higher prices.

Aluminum fell 0.5 percent to $2,195 a ton, and zinc dropped 1.7 percent to 1,879 a ton. Lead fell as much as 7.9 percent to 1,800 a ton, the lowest since July 2010. Nickel declined 3.4 percent to $17,650 a ton, and tin retreated 5.9 percent to $19,005 a ton.

Sep 26, 2011

METALS-Copper gains, EU finance ministers' meeting eyed

METALS-Copper gains, EU finance ministers' meeting eyed 

 

 
 LONDON, Sept 16 (Reuters) - Copper rose on Friday, building on strength
gained from the previous session after a funding plan for banks allayed fears
over Europe's festering debt crisis, but the region's financial problems were
expected to keep weighing on prices. 	
  Three-month copper on the London Metal Exchange (LME) traded at
$8,810 a tonne in LME rings from $8,711 a tonne at the close on Thursday.	
  "The improvement in market sentiment stems from the actions taken ... in
providing dollar liquidity to European banks," Natixis analyst Nic Brown said.	
  Major central banks around the world will cooperate to offer three-month
U.S. dollar loans to commercial banks to keep money markets from freezing up in
the wake of Europe's sovereign debt crisis. 	
  The European Central Bank said on Thursday it would hold three fixed-rate
operations between October and December to provide banks with as many dollars as
they needed, in order to ease any funding crunch over the year-end. 	
 But the plan is likely to offer only short-term relief to the metals
markets, as investors remain sceptical of any speedy resolution to the crisis. 	
 "Yes it's good that short term liquidity has been provided which will help
... but ultimately the question is all about long term fiscal sustainability,
and we are miles away from that yet," Brown said.	
  "It's clear that any kind of negative outcome in Europe could be very
dangerous indeed. That is clearly where the risks lie at the minute for the
global economy as a whole. We are not out of the woods yet."	
  U.S. Treasury Secretary Timothy Geithner told EU finance ministers on
Friday they should end loose talk about a euro zone break-up and work more
closely with the European Central Bank to tackle the debt crisis. 	
 Speaking after discussing with ministers the possibility of leveraging the
euro zone's bailout fund to give it more clout to tackle the region's debt
problems, Geithner said Europe would not see similar global financial
coordination as there was in 2009, but that Washington would do what it could to
help.
Fri Sep 16, 2011 8:31am EDT

Oil Drops Before U.S. Jobs Data; Gulf of Mexico Rigs Shut as Storm Builds

Oil Drops Before U.S. Jobs Data; Gulf of Mexico Rigs Shut as Storm Builds

 

Oil dropped in New York, trimming a second weekly gain, as investors speculated a U.S. jobs report will signal the economy is weakening, curbing fuel demand in the world’s biggest crude consumer. A tropical depression shut rigs in the Gulf of Mexico.

Futures fell as much as 0.6 percent before data today that may show companies slowed hiring last month. Oil rose earlier after almost 6 percent of crude output in the Gulf was shut ahead of the strengthening storm. The depression may approach the southern coast of Louisiana this weekend, according to the National Hurricane Center.

“Demand out of the U.S. is pretty flat at the moment,” said Gavin Wendt, founder of Mine Life Pty., an energy and mining analyst based in Sydney. “The fear that supplies are going to be impacted can increase the risk premium that’s associated with crude.”

Oil for October delivery fell as much as 54 cents to $88.39 a barrel in electronic trading on the New York Mercantile Exchange and was $88.47 at 3:31 p.m. Singapore time. The contract yesterday gained 12 cents to $88.93, the highest close since Aug. 3. Prices are up 3.6 percent this week and 18 percent the past year.

Brent oil for October settlement was at $113.95, down 34 cents, on the London-based ICE Futures Europe exchange. The European benchmark was at a premium of $25.52 to U.S. futures, up from $25.36 at yesterday’s settlement and compared with a record close of $26.21 on Aug. 19.

Rig Evacuations

New York oil dropped 7.2 percent last month amid speculation the U.S. economy is slowing. A Labor Department report today may show non-farm payrolls climbed by 68,000 last month after a 117,000 increase in July, according to a Bloomberg News survey of economists.

About 5.7 percent of Gulf oil production and 2.4 percent of natural gas output has been shut, according to the Bureau of Ocean Energy Management, Regulation and Enforcement.

The tropical depression, about 240 miles (385 kilometers) southwest of the Mississippi River mouth, was “nearly stationary,” the Miami-based center said in an advisory issued before 2 a.m. East Coast time. It may strengthen into a tropical storm before reaching Louisiana’s coast.

BP Plc is evacuating all personnel at platforms in the Gulf of Mexico, according to a message on the company’s hurricane hot line. Anadarko Petroleum Corp. removed workers from its Gulf facilities and is shutting output at eight operating platforms.

Shell, Exxon

Royal Dutch Shell Plc said it was evacuating employees from most of its operations and has shut in some production, mainly from subsea fields. Exxon Mobil Corp. pulled 140 workers from platforms and shut in 11,000 barrels a day of liquids output.

Noble Corp. took about 300 workers from three of five active rigs in the Gulf. ConocoPhillips evacuated all workers and shut in output from the Magnolia platform, which averaged daily production of 5,000 barrels of oil equivalent last year.

Tropical Storm Katia, another Atlantic weather system, may restrengthen in the next 24 hours after being downgraded from a category 1 hurricane, according to the hurricane center. The forecast path shows Katia north of Puerto Rico, east of the Bahamas and south of Bermuda by Sept. 6.

A shift westward may bring the storm to land in eastern Canada, according to AccuWeather Inc. Canada’s Atlantic region is a major gasoline supplier for the Northeast, exporting 469,704 cubic meters, or 2.96 million barrels, of the fuel in May.

Sep 2, 2011

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