Oil
extended losses in Asian trade Thursday on data showing weak energy demand in
the United States, the world's biggest oil-consuming nation, and persistent
fears over the Greek debt crisis.
New York's main contract, light sweet crude for delivery in
October, was down 44 cents to $88.47 in afternoon trade and Brent North Sea
crude for October settlement eased 29 cents to $112.11.
The US Department of Energy said Wednesday US crude oil
inventories slipped by 6.7 million barrels last week, but analysts said the
plunge was mainly a result of production shut in when tropical storm Lee passed
through the Gulf of Mexico.
Investors focused more on gasoline stockpiles, which rose by
1.9 million barrels, indicating weak demand.
"The weaker demand in gasoline is bearish news for crude
oil demand," said Ker Chung Yang, a commodity analyst at Phillip Futures
in Singapore.
Other analysts said the market remains encumbered by concerns
over Greece's debt crisis despite statements by France and Germany they were
convinced that Athens' future lay in the eurozone.
Global markets had been in turmoil on rising expectations of
a Greek default or even an inglorious exit from the eurozone, stemming from its
ongoing troubles to apply a recovery plan by the European Union and
International Monetary Fund.
"Markets still need to be convinced that it (Europe) has
a credible mechanism to manage the crisis," DBS Bank said in a market
commentary.
Meanwhile, Oil prices will likely rise to about $130 a
barrel in the next 12 months as demand in emerging markets such as China and
India make up for weak developed world growth, Goldman Sachs said Thursday.
Despite concerns about the US economy and eurozone sovereign
debt, which have hit crude prices due to an expected fall in demand, the Wall
Street giant forecast commodity prices to remain buoyant.
At the same time it tipped gold -- a safe haven in times of
economic uncertainty -- to cost $1,860 an ounce in a year, much lower than the
record high of $1,921.15 it hit last month.
The large emerging economies of the BRICS -- Brazil, Russia,
India, China and South Africa -- are forecast to grow 7.7 percent this year and
7.9 percent in 2012.
By contrast, advanced economies are projected to expand only
1.7 percent this year and 2.1 percent next year, Goldman Sachs said.
Brent crude, which is traded in London, is expected to hit
$130 a barrel in the next year, from current levels around $112, the bank said.
West Texas Intermediate (WTI) light sweet crude oil, traded
on the New York Mercantile Exchange, is forecast to reach $126.50 a barrel over
the same period from current $88.
Both contracts touched all-time highs of above $147 a barrel
in July 2008 before the onset of a global financial crisis.
"Clearly, there is very little growth anticipated to
come from the US, EU and the developed markets," said Allison Nathan,
senior commodities economist at Goldman Sachs.
"But we expect quite robust emerging market demand
growth with China still anticipated to grow at 9.2 percent next year and
overall the BRICS countries close to eight percent," she told reporters in
Singapore.
Nathan said the spread between WTI crude and Brent should
narrow in the future but it was still unclear when the gap will close.
The high inventory level at the US oil hub in Cushing,
Oklahoma, has led to WTI trading at a significant discount compared with other
light sweet crudes such as Brent, Goldman Sachs said.
It added that transportation pipelines must be upgraded to
improve delivery.
"While we expect that alternative transportation
capacity such as rail, truck and barge shipments will expand rapidly over the
coming months, we believe that WTI will remain volatile and prone to
dislocations in the future until the pipeline infrastructure is improved,"
it said.
For gold, the US bank said an environment of low interest
rates and central bank buying will support prices for the precious metal.
Low interest rates drive investors to buy gold for higher
returns, boosting prices.
Prices for industrial metals such as aluminum, copper and
nickel are also expected to rise, with Chinese demand a key driver.
"China is the single largest consumer of almost all
commodities," said Julian Zhu, the China commodities analyst at Goldman
Sachs.
"China is good at oversupplying so whichever commodity
China is short of will likely have the strongest demand and pricing. Therefore,
copper is our preferred metal," he said.
Last year, China's share of the total global consumption for
steel was 45 percent, 76 percent for iron ore, 41 percent for aluminum and 39
percent for copper, according to the US bank.
"China's per capita copper consumption is far below that
of developed countries with high-end manufacturing industries. This suggests
substantial upside for China's demand for copper," added Zhu.
China consumed 5.4 kilograms of copper per person in 2010,
compared with 7.2 kilograms in the OECD countries, he said.
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Source : AFP
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