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Commodities markets summary

Reported by AAP
Friday, September 19, 2014
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A summary of trading in key commodities markets overseas:

ENERGY

Crude oil prices have slid as US commercial stockpiles mounted again and a report said OPEC might not cut output to deal with an oversupplied market.

US benchmark West Texas Intermediate for delivery in October dropped $US1.35 to $US93.07 a barrel.

Brent North Sea crude for November lost $US1.27 to stand at $US97.70 a barrel in London deals.

Oil prices came under pressure after the weekly US crude stockpiles report showed a rise of 3.7 million barrels instead of the decline of 1.2 million barrels expected by the market.

Analysts at Singapore's United Overseas Bank said oil prices also took a hit from "conflicting reports" about the likelihood that the Organisation of the Petroleum Exporting Countries could cut its output because of a global supply glut and weaker demand.

OPEC secretary general Abdullah El-Badri this week said that the cartel would cut output in November, which helped lift prices from a two-year low.

But a Dow Jones Newswires report, citing unnamed OPEC delegates, said the cartel was unlikely to cut its production.

Markets also kept an eye on the Scottish independence referendum Thursday, but there was no clear path for crude prides from either possible result, though it would put in play Scotland's rights to North Sea oil wealth.trading hub.

PRECIOUS METALS

Gold fell Thursday to an eight-month low, while silver sank to a four-year low, as investors digested the Federal Reserve's plans for tighter monetary policy.

Gold for December delivery, the most active contract, fell $9, or 0.7 per cent, to settle at $1,226.90 a troy ounce on the Comex division of the New York Mercantile Exchange.

This was the lowest settlement since January 8.

December-delivery silver futures fell 21.7 cents, or 1.2 per cent, to settle at $18.517 an ounce, their lowest level since August 24, 2010.

Investors shed holdings of both precious metals as they continued to sift the Fed's policy statement, released Wednesday afternoon after Comex floor trading had closed for the day.

The central bank reiterated its plans to end monthly asset purchases in October and laid out a clearer plan for normalising monetary policy through higher interest rates and other tools.

"The fact that they came out and basically gave a deadline for ending the stimulus, after years of supportive measures, is sending a positive signal about the US economic outlook," said Thomas Capalbo, a broker with Newedge.

"The belief that we are on track and the economy is going to function on its own is good news for the dollar and bad news for gold," he said.

BASE METALS

Copper prices ended lower on Thursday as weaker housing market data from China and the US fanned worries about metal demand from the world's number one and two copper users.

The most actively traded contract, for December delivery, fell 4.95 cents, or 1.6 per cent, to settle at $3.0940 a pound on the Comex division of the New York Mercantile Exchange.

Copper prices have been under pressure throughout 2014 as concerns about a slowdown in China's economy weighed on investor interest in the metal.

China accounts for about 40 per cent of global copper demand, and the metal's widespread use in manufacturing and construction makes its price sensitive to shifts in economic outlook.

On Thursday, copper futures fell after data showed that prices of new homes in 70 Chinese cities fell 1.1 per cent in August, the fourth straight monthly decline.

The drop in home prices had accelerated last month, as home values fell just 0.89 per cent in July and 0.47 per cent in June.

21/09/2014 06:00Sydney, Australia. 21 September,2014
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