Commodities savaged in sell-everything Friday
Global commodity prices continued to tumble Friday as the fast-spreading coronavirus epidemic sparked fears for global growth prospects and demand for raw materials from fuel to food.
International benchmark Brent crude slipped below $50 a barrel for the first time since December 2018, and shares in mining companies plummeted. A gauge of grain prices is also heading for a back-toback monthly loss, and even gold—a haven asset—has come under pressure.
The coronavirus continues epidemic to spread, now more quickly outside of China than within the country, as the first cases are reported in Latin America and SubSaharan Africa and travel and event restrictions are imposed in Europe and Asia. Major commodity trading houses are also keeping employees from going abroad and several events this week at the oil industry’s biggest gathering were cancelled. That’s spurred a stampede away from risk assets, with no appetite for dip-buying before the weekend.
Oil in London is on course for its biggest weekly loss since 2016 ahead of a crucial meeting next week in Vienna between Opec and its allies about whether to extend the current deal to curb output and keep prices stabilised. Saudi Arabia wants the Opec and its allies to agree to collective production cuts of an additional 1 million barrels a day. Brent crude for May delivery sank as much 4.2% to $49.58 a barrel on the ICE Futures Europe exchange but
Gold futures fell as much as 1.2 per cent to $1,622.50 an ounce, set for a weekly loss. Standard Chartered Bank said the drop in bullion may be driven by investors selling the metal to cover margin calls in tumbling equity markets,.
Base metals are heading for a second monthly drop with zinc and aluminum hitting their lowest levels in more than three years.LME copper fell as much as 1.5 per cent to $5,533 a tonne, with inventories in China expanding to the highest levels in almost three years, indicating slumping demand.
In crops, palm oil headed for its worst week in 11 years in Malaysia on slumping petroleum prices, weaker exports and concern over the coronavirus.