Commodities Update - December 22, 2012 - HDFC Securities

International crude oil prices (WTI) rose 2.23% for the week ended 21st December 2012 to close at USD 88.88 per barrel. U.S. crude-oil futures rose 1.8% Wednesday to a two-month high after government data showed a jump in demand for diesel and heating oil. Crude gained the most since Dec. 3, 2012. The price of crude oil rose to a two-month high after the U.S. Energy Department said inventories decreased as refineries ramped up operations, increasing demand for crude. Oil prices also got a boost from a key survey measuring German business optimism. It showed slight improvement and was good news for Europe's largest economy and on speculation that an agreement will be reached to avert a US budget impasse that would trigger automatic spending cuts and tax increases next year, sapping demand for fuels.

International gold prices fell 2.17% for the week to close at USD 1660.10 per ounce. Gold was near a four-month low on Friday and set for its steepest weekly loss since June as investors were discouraged by a weaker euro and stalled U.S. budget talks. Gold headed for the worst week in six months as the struggle by U.S. lawmakers to reach a budget deal strengthened the dollar, countering purchases by central banks and investors.

Base metals on the LME closed negative for the week ended 21st December 2012 except Lead and Tin. The major losers in the week were Copper (2.65%), Aluminium (2.41%), Nickel (1.41%) and Zinc (0.89%). Copper fell capping the longest string of declines since October, as signs that U.S. budget talks are faltering dimmed prospects for economic growth and metals demand.

The Baltic dry index (BDI), which is a global index tracking the movement of cargo by the sea route registered a fell 14.29% for the week ending 21st December 2012 to close at 708 levels. The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell as an oversupply of new vessels swells the fleet amid slowing global demand for seaborne commodities, weighing on freight rates.

Source : Equity Bulls

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