Business | Markets
Oil, copper lead commodity slide
Investors worry about falling demand due to eurozone crisis
- Bloomberg
- Published: 00:00 September 15, 2011
Singapore: Commodities declined, led by crude oil and copper, on concerns that demand for raw materials may ease as the Eurozone debt crisis remains unresolved and the Asian Development Bank cut its growth forecast for the region.
Greek Prime Minister George Papandreou was expected to hold a conference call with German Chancellor Angela Merkel and French President Nicolas Sarkozy late yesterday amid increasing speculation that Greece will default. The Manila-based ADB cut its 2011 growth forecast for Asia excluding Japan to 7.5 per cent from an April estimate of 7.8 per cent, according to the Asian Development Outlook 2011 Update report released yesterday.
"Sovereign-debt problems still wait for credible solutions, leaving risk appetite on shaky ground," Stefan Graber, a commodity analyst at Credit Suisse AG in Zurich, wrote in an emailed report yesterday. "For now we take a cautious stance on the cyclical metals space."
Standard & Poor's GSCI index tracking raw materials fell 0.7 per cent to 654.17. New York-traded oil futures lost $1.04, or 1.2 per cent, to $89.17 [Dh327.25] a barrel and copper slipped 1 per cent to $8,680.25 a metric tonne on the London Metal Exchange.
Inflation estimate
Commodities gauged by the S&P GSCI Index pared this year's gain to 3.6 per cent, weighed down by investors' concerns about the slowing US and Eur-opean economies. The ADB raised the region's inflation estimate to 5.8 per cent this year, from a previous forecast of 5.3 per cent. China, the top user of copper, energy and grains, raised interest rates for the third time this year in July to combat rising consumer prices.
Chinese Premier Wen Jiabao yesterday called on developed nations to cut their deficits and create jobs rather than relying on his nation to bail out the world economy.
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