MARKETS: Jump in copper stocks on LME
By Robert Corzine and Agencies
London Metal Exchange warehouse stocks of copper rose 16,150 tonnes to 323,550 tonnes yesterday, the largest one-day increase for over a year. Traders suggested it was the result of action by a commercial trader who was being squeezed.
While the rise had little impact on the benchmark LME three-month price, the September-October backwardation evaporated. Backwardation occurs when prices for immediate delivery are higher than those for future delivery. At the kerb close, three-month copper was unchanged at $1,642 compared with Tuesday.
Oil prices softened yesterday after tropical storm Earl passed through the main US offshore oil producing area in the Gulf of Mexico, apparently without causing any significant damage.
Brent Blend for October delivery was quoted at $12.55 a barrel in late trading on London's International Petroleum Exchange, 4 cents down on Tuesday's close.
Yesterday afternoon oil companies began sending crews back to offshore platforms that had been evacuated on Tuesday as the storm approached the area.
The US government's Minerals Management Service reported that 60 per cent of the Gulf's oil capacity, equivalent to 658,000 barrels a day of output, had been shut in as a result of the hurricane precautions.
The markets were also affected by the latest figures on US crude and refined product stocks. The American Petroleum Institute reported the third consecutive weekly draw-down in crude inventories, although US oil stocks are still 30m barrels higher than at this time last year.
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