Oil leads market as China sends investors fleeing
LONDON: Commodity markets lurched lower on Monday after Chinese equities resumed their slide, fuelling worries of a hard landing in the world's biggest consumer of raw materials. Crude oil tumbled to its weakest levels in 61/2 years while industrial metals prices also hit multi-year lows amid a broad sell-off of risky assets. Investors took flight after the Chinese stock market posted its biggest oneday loss since the height of the global financial crisis in 2007, plunging more than 8 percent. The 19-commodity Thomson Reuters/Core Commodity CRB Index . TRJCRB has shed more than 16 percent so far this year.
Oil led the downward charge as Brent crude futures LCOc1 fell more than $2 a barrel to their lowest since March 2009. "Today's falls are not about oil market fundamentals. It's all about China," Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt, told Reuters Global Oil Forum. In metals, copper CMCU3 and aluminum CMAL3 hit their lowest since 2009 while iron ore and steel futures in China slid sharply to reach their downside limit. Three-month copper on the London Metal Exchange CMCU3 fell as much as 3 percent to $4,903 a tonne, its lowest since July 2009. Copper has shed 22 percent in 2015, on track for its third consecutive yearly fall. Gold edged down, but remained close to a seven-week high as the dollar and shares tumbled. Spot gold XAU= shed 0.5 percent to $1,154.81 an ounce as investors took profits after the metal hit its highest since July 7 on Friday. "Gold is holding on to some of the gains it made last week and that speaks to the difficulty in the global equity market right now," Mitsubishi Corp strategist Jonathan Butler said.