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COMMODITIES-Down broadly; oil tumbles on Saudi supply pledge
March 20, 2012 / 5:17 PM / 6 years ago

COMMODITIES-Down broadly; oil tumbles on Saudi supply pledge

* Oil down over 1 pct on Saudi assurance of supply
    * Gold, copper slide, pressured by stronger dollar
    * Agricultural markets broadly lower too; juice down 4 pct

    By Barani Krishnan	
    NEW YORK, March 20 (Reuters) - Oil prices fell more than $1
a barrel in London and nearly $2 in the U.S. market on Tuesday
after Saudi Arabia assured that it will increase crude exports
to compensate for the loss of Iranian oil. Gold also tumbled as
the dollar rebounded.	
    The dollar gained against the euro and other major
currencies as concerns about China's growth sent
investors scurrying from high-yielding currencies to the safety
of the greenback. Copper prices slid too, pressured by
the dollar. 	
    The 19-commodity Thomson Reuters-Jefferies CRB index 
fell around 1 percent -- its most in two weeks -- as the bearish
trend extended to a number of agricultural markets.	
    Aside from crude oil, the commodities that weighed most on
the CRB included orange juice -- which fell nearly 4 percent --
and silver -- which lost more than 2 percent.	
    (CRB graphic link.reuters.com/naw27s)	
    Crude prices fell after Saudi Arabia reassured oil markets
that it was ready to increase exports to meet the loss of any of
shipments from Tehran, and also work to return prices to fair
levels.	
    Brent crude oil in London fell nearly $1.50, or 1.2
percent, to trade below $124.50 per barrel. 	
    U.S. crude fell nearly $2, or about 1.8 percent, to
hover under $106.20 a barrel. 	
    Saudi Arabian Oil Minister Ali al-Naimi told a media
briefing in Qatar that his kingdom was pumping 9.9 million
barrels per day, the highest level in decades.	
    The production could be cranked up to a maximum of 12.5
million bpd, Naimi said, although supply was outpacing demand by
more than 1.0 million bpd now.	
     "I want to assure you that there is no shortage of supply
in the market," Naimi said. "We are ready and willing to put
more oil on the market, but you need a buyer." 	
    Supply concerns over oil also eased after the ruler of
Kuwait said Iran officials had assured him that Tehran would not
close the Strait of Hormuz in retaliation against Western
sanctions on Iranian oil. Some 35 percent of global crude
sea-borne shipments pass through the strait. 	
    Gold fell for the first time in four days, hampered by the
strength in the dollar. 	
    Adding to the negative mood in gold was a sharp rise in
benchmark 10-year U.S. Treasury yields, which have
gained more than a third of a percentage point in less than a
week, while holdings of the metals in exchange-traded products
staged their largest one-day drop since late January.	
    "Gold is looking for support and buyers and so far probably
has not found either," said Ole Hansen, senior manager at
Denmark's Saxo Bank.	
    The spot price of gold, which tracks trades in bullion
, fell more than half a percent to hover around $1,650 an
ounce, offsetting part of the 1.2 percent gain in three previous
sessions.	
    Copper prices fell 2 percent, the sharpest drop in two
weeks, reacting to the firmer U.S. currency and concerns raised
by BHP Billiton, the world's biggest miner, about the
possibility of a sharp slowdown in iron ore demand from top
metals consumer China.	
    Benchmark three-month copper in London was at $8,408
per tonne in official rings, from a close of $8,570 on Monday.  
 	
 Prices at 12:50 p.m. EDT (1650 GMT)                      
 
                              LAST      NET    PCT     YTD
                                        CHG    CHG     CHG
 US crude                   106.21    -1.88  -1.7%    7.5%
 Brent crude                124.14    -1.57  -1.3%   15.6%
 Natural gas                 2.342   -0.009  -0.4%  -21.6%
 
 US gold                   1653.90   -13.40  -0.8%    5.6%
 Gold                      1653.44    -6.96  -0.4%    5.7%
 US Copper                  381.85    -9.05  -2.3%   11.1%
 LME Copper                8395.00  -172.25  -2.0%   10.5%
 Dollar                     79.566    0.114   0.1%   -0.8%
 CRB                       316.670   -2.750  -0.9%    3.7%
 
 US corn                    652.00   -11.50  -1.7%    0.9%
 US soybeans               1348.50   -18.00  -1.3%   12.5%
 US wheat                   645.75    -6.50  -1.0%   -1.1%
 
 US Coffee                  183.90     0.40   0.2%  -19.4%
 US Cocoa                  2370.00    81.00   3.5%   12.4%
 US Sugar                    25.63    -0.03  -0.1%   10.3%
 
 US silver                  32.265   -0.690  -2.1%   15.6%
 US platinum               1654.20   -30.50  -1.8%   17.7%
 US palladium               696.00   -11.60  -1.6%    6.1%
 	
 (Editing by Bob Burgdorfer)

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