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Copper price boosted due to flood of oil

Date: Fri, 24 Jun 2011 | Author: Paul Sanderson

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The price of copper was trading higher in early trading on Friday, as investors responded to the announcement of emergency oil supplies entering the market and optimism over the Greek debt crisis.

Three-month copper was up 1.1 per cent on the LME at 4:01am this morning, after having lost 0.6 per cent in the previous session.

The September copper contract on the Shanghai Futures Exchange gained 1 per cent to 67,970 per tonne.

Jonathon Barratt managing director of Commodity Broking Services said: “There are two things moving the metals markets today. First, there is a slight relief at what has happened out of Greece. But the problems there are by no means out of the way yet.

“Also supporting prices is news of the International Energy Agency releasing oil reserves, which is like a stimulus package for the global market.”

Greece yesterday managed to get agreement from European leaders on a €120 billion (£107 billion) bailout package. However, this still needs to be put in front of the Greek Parliament next week.

As scrap-ex news reported yesterday, the International Energy Agency is to place 60 million barrels of oil onto the global market over the next month.

Oil prices as a result fell yesterday with the cost of a barrel of Brent crude falling $8 to $105.72, while oil in New York was down to $90 per barrel.

This morning Asian stock markets rebounded following progress with Greece and the oil release, with the Nikkei up 0.7 per cent this morning.

Stock markets across the world suffered yesterday on a wave of poor economic news. The US government said that its growth would be slower this year and after predictions of a fall in unemployment there, it actually rose with 429,000 new unemployment claims.

China also reported that its manufacturing output has barely grown in June, while in the eurozone manufacturing and services output slowed sharply to a 20-month low this month.  

In the UK, more retailers also reported in the CBI’s monthly retail report that business was deteriorating than those who said it was improving. 

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