SINGAPORE, Nov 28 — Commodities retreated to a five-year low as crude oil tumbled after OPEC refrained from cutting output to ease a global glut. Gold and copper also declined.
The Bloomberg Commodity Index of 22 raw materials dropped as much as 2.1 per cent to 115.0054, the lowest since July 2009, before trading at 115.1843 by 3:44pm in Singapore. The index resumed trading today after the US Thanksgiving holiday yesterday when Brent crude plunged 6.7 per cent after a meeting of the Organization of Petroleum Exporting Countries in Vienna took no action to relieve the supply glut.
Commodities are poised for a fourth straight year of losses as the West Texas Intermediate futures are set for the biggest slump since the 2008 financial crisis. China, the world’s largest consumer of metals to fuels, is headed for the slowest yearly expansion pace since 1990. The Bloomberg Dollar Spot Index, which tracks the US currency against 10 major peers, is set for the highest close since March 2009.
“Precious metals declined as lower oil prices prompted concerns about deflation,” Australia & New Zealand Banking Group Ltd said in a report today. Industrial metals have been hurt by the drop in oil price as it may help reduce production costs, it said.
The OPEC maintained its collective production ceiling of 30 million barrels a day, Ali Al-Naimi, Saudi Arabia’s oil minister said yesterday after the 12 nations met in the Austrian capital. WTI futures, the US benchmark that wasn’t trading yesterday, dropped as much as 8.1 per cent today to US$67.75 (RM226.28) a barrel.
Spot gold fell as much as 0.9 per cent to US$1,181.84 an ounce, the lowest intraday level since November 20, and set for the first weekly loss in four. Benchmark copper lost as much as 1.1 per cent to US$6,484.25 a metric ton on the London Metal Exchange, heading for a 3.1 per cent decline this week, the most for the five-day period since March. — Bloomberg