Currency Call for Today

Market Commentary

Market Commentary

Oil Falls to 2013 Low on China, Europe Manufacturing

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West Texas Intermediate oil slipped to the lowest level this year as manufacturing

expanded less than forecast

in China and contracted in Europe , bolstering concern that fuel demand will decline.

Futures fell 1.5 percent after data showed China’s manufacturing growth slowed for a second month while factory output declined in the euro area and the U.K. The factory data helped the

U.S. dollar strengthen against the British pound and the euro. Astronger dollar curbs the appeal of raw materials to investors.

“Oil is down because of the disappointing

manufacturing index data overnight, especially the Chinese number, which shows the country had the smallest of expansions,” said John Kilduff , a partner at Again Capital LLC, a New York

-based hedge fund that focuses on

energy. “U.K. manufacturing has plunged into contraction, which is going to hurt demand.”

Crude oil for April delivery fell $1 37 to $90.68 a barrel on the New York Mercantile Exchange

, the lowest settlement since Dec. 24 Prices dropped 2.6 percent this week.

Brent oil for April settlement dropped 98 cents, or 0.9 percent, to end the session at $110.40 a barrel on the London based ICE Futures Europe exchange. It was the lowest close since Jan.

15. Volume was 52 percent above the 100 day average. The European benchmark grade traded at a premium of $19.72 to WTI, up from $19.33 yesterday

 

The China numbers came in below expectations, and that implies that manufacturing and copper demand in that country aren’t going to be particularly robust for the next little while,

Bart Melek, the Toronto based head of

commodity strategy at TD Securities, said in a telephone interview. “Inventories in Europe and

Asia are rising.”Copper futures for May delivery dropped 1.3 percent to settle at $3.501 a pound

on the Comex in New York. Earlier, the price touched $3.4725, the lowest for a most active contract since Nov. 19. On the London Metal Exchange, aluminum for delivery in three months fell 1.5 percent to $1,975 a metric ton. Earlier, the price touched $1,956, the lowest since Nov. 23. The metal dropped for the 10th straight session, extending the longest slump since June.

Copper on the LME fell 1.4 percent to $7,703 a ton ($3.49 a pound). Lead, zinc and tin also dropped,

while nickel rose. In a report titled “Buying the Dip,” Goldman Sachs Group Inc. said today that copper will rebound as China’s imports pick up and the U.S. housing market recovers. The price may rise to $9,000 a ton in six months, the bank said.

Industrial metals and energy led commodities lower today. The Standard & Poor’s GSCI

Spot Index of 24 raw materials erased this year’s gain

 

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