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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: IngotWeTrust who wrote (24127)	12/11/1998 5:42:00 AM
From: Alex	Respond to of 116972

Commodity Index at 20 Year Low Oil slides below $10/barrel World oil prices slid further below $10 a barrel yesterday, touching a new 12-year low in London. Overall commodity prices have dropped to their lowest level for 21 years in recent days, putting exporting nations under great pressure as their revenues tumble. Brent blend oil futures, a world benchmark price, fell 11 cents to $9.87 a barrel in late trading on London's International Petroleum Exchange yesterday, less than half the level of a year ago. Oil prices have lost more than $1.50 a barrel in less than a month. US prices dropped below $11 by around midday, slipping to $10.85 a barrel from $11.16. The continuing fall in oil prices is undermining the economies of leading petroleum exporters. Some members of the Organisation of Petroleum Exporting Countries have seen their revenues fall more than 40 per cent this year, with collective oil earnings for the group likely to fall by some $50bn from last year's level. The weakness of the global economy has also depressed the market for commodities across the board with wheat and base metals prices dropping - many to their lowest levels for 10 years. The Bridge/CRB Futures Price Index, the benchmark for world commodity prices, declined to 191.37 late yesterday after closing at 191.39 the day before, its lowest since 1977. The index comprises futures prices from the main commodity sectors, including livestock, coffee, cocoa, sugar, grains, energy, base and precious metals. Copper has led the base metals sector downwards on the London Metal Exchange, the main trading arena. The benchmark copper contract is trading at its lowest for more than 11 years at just above $1,500 a tonne. In the middle of last year, it was more than $2,500 a tonne. "The picture is of weakened demand because of the Asian crisis, signs of a slowdown in Europe and expectations of a slowdown in North America," Kevin Crisp, commodities strategist at J.P. Morgan in London, said yesterday. "Oil inventories are too high and most producers want cuts in output to support the price," one energy analyst said yesterday. "But Opec has put off the decision until March." Warm weather is also depressing heating oil and natural gas prices. Forecasts of a colder than usual winter in the northern hemisphere had led traders to expect a drawdown in stocks during the next few months. However, temperatures in the US north-east - crucial to the US heating oil market - are currently 20 per cent higher than normal. US heating oil demand is 3.5 per cent lower than this time last year, according to the US Energy Department. Metals producers know the market is oversupplied but most are reluctant to cut output in case the price rallies and they are left with a lower market share, according to one analyst. The slump in agricultural commodity prices has hit US farmers, especially in the northern plains states where wheat accounts for 45 per cent of output. Wheat prices are trading at around 280 cents a bushel on the Chicago Board of Trade, down from 370 cents at the beginning of the year. The Financial Times, Dec. 11, 1998