Brexit batters commodities

AFP, PARIS: Most commodity prices were sent tumbling on Friday following a surprise British vote to leave the European Union, but gold benefitted from a flight to safety.
With the vote clouding global growth prospects, a sell-off swept commodities.
Oil prices were hit particularly hard as the dollar leapt in value against most currencies.
Brent North Sea crude at one point on Friday morning touched a low of $47.54 per barrel - reversing gains made over the week and 3.0 per cent lower than the previous week’s closing price.
With crude priced in dollars, demand slides from countries that use other currencies when the US unit rises in value.
Crude futures came under pressure this week also from a smaller-than-expected fall in US crude inventories, adding to concerns about weak demand in the world’s biggest economy and abundant global supplies. By 1330 GMT, Brent stood at $48.31 per barrel - down 5.0 per cent in Friday trading and 1.7 per cent over the week. US oil prices also fell as markets opened, hitting $47.57 per barrel by 1400 GMT - completely wiping out gains made over the week.
Base industrial metals began sliding as soon as initial vote counts emerged early on Friday morning, with nickel the biggest loser at 4.5 per cent.
Tin was close behind, suffering a fall of 4.4 per cent to a three-week low of $16,485 (14,900 euros) a tonne on the London Metal Exchange.
But the metals’ slip was braked by continuing confidence in China, where stock markets remained calmer than other Asian bourses in the wake of the UK referendum.
With China the largest consumer of industrial metals worldwide, stable confidence there limited the price impact from Brexit. Commerzbank analysts suggested that markets would likely right themselves after the initial shock as investors turn their gaze back to fundamentals.
Cocoa prices—already on an upward trend after a hot, dry summer in Ivory Coast hit production—surged further in Friday trading in London to 2,325 pounds ($3,210) a tonne.
“Volatility linked to Brexit is likely to strongly affect cocoa prices in the short term,” said Sebastien Marlier of the Econo-mist Intelligence Unit, adding that the weak pound would likely push prices yet higher.

Brexit batters commodities

AFP, PARIS: Most commodity prices were sent tumbling on Friday following a surprise British vote to leave the European Union, but gold benefitted from a flight to safety. With the vote clouding global growth prospects, a sell-off swept commodities. Oil prices were hit particularly hard as the dollar leapt in value against most currencies. Brent North Sea crude at one point on Friday morning touched a low of $47.54 per barrel - reversing gains made over the week and 3.0 per cent lower than the previous weeks closing price. With crude priced in dollars, demand slides from countries that use other currencies when the US unit rises in value. Crude futures came under pressure this week also from a smaller-than-expected fall in US crude inventories, adding to concerns about weak demand in the worlds biggest economy and abundant global supplies. By 1330 GMT, Brent stood at $48.31 per barrel - down 5.0 per cent in Friday trading and 1.7 per cent over the week. US oil prices also fell as markets opened, hitting $47.57 per barrel by 1400 GMT - completely wiping out gains made over the week. Base industrial metals began sliding as soon as initial vote counts emerged early on Friday morning, with nickel the biggest loser at 4.5 per cent. Tin was close behind, suffering a fall of 4.4 per cent to a three-week low of $16,485 (14,900 euros) a tonne on the London Metal Exchange. But the metals slip was braked by continuing confidence in China, where stock markets remained calmer than other Asian bourses in the wake of the UK referendum. With China the largest consumer of industrial metals worldwide, stable confidence there limited the price impact from Brexit. Commerzbank analysts suggested that markets would likely right themselves after the initial shock as investors turn their gaze back to fundamentals. Cocoa pricesalready on an upward trend after a hot, dry summer in Ivory Coast hit productionsurged further in Friday trading in London to 2,325 pounds ($3,210) a tonne. Volatility linked to Brexit is likely to strongly affect cocoa prices in the short term, said Sebastien Marlier of the Econo-mist Intelligence Unit, adding that the weak pound would likely push prices yet higher.