Crude oil slips below 3,000-mark, silver dips 4.5%

Written by Commodities Bureau | Mumbai, Nov 16 | Updated: Nov 17 2008, 06:10am hrs
Crude oil futures prices in the domestic market last week slipped below the Rs 3,000-mark on the national platform following, weak overseas markets amid global economic weakness. Crude oil prices fell for a second week in a row amidst falling global oil demand. Prices touched a 22-month low of $56 on Wednesday.

Weak macroeconomic data from the US and Europe is renewing concern over slow economic growth and weak energy demand. Last week, inventory data showed no change in oil stocks, but gasoline and distillates inventory rose more than expected.

Gold prices continued to trade range-bound. Bullion prices are primarily being affected by currency movements and to some extent by crude prices. The MCX Gold December contracts improved marginally and settled at Rs 11,641 per 10 gram over the previous week.

"Technically speaking, gold is range-bound, with the overall-trend still remaining down unless we see a daily close above $772 an ounce," an analyst with Angel Broking said.

The MCX Silver December contracts were lower by 4.56% to settle at Rs 16,269 per 10 gram over the previous week.

The MCX Crude oil December contracts were down by 4.63% to trade at Rs 2,943 per barrel on Friday over the previous week. Opec has decided to cut output, to curb the downside in oil prices.

But currently, the market is more worried about demand destruction than any supply-related issues. Factors like a stronger dollar, a weakening global economy and rising inventory can weigh on oil prices.

"Crude oil prices are expected to remain range bound, with resistance seen at $64 a barrel in the near term," analyst said.

The MCX Copper November contracts were lower by Rs 2.50 to settle at Rs 187.50 per kg over the previous week. Base metals pack has witnessed steep declines in the past few weeks.

With prices going below their marginal cost of production, sentiments for the metals weakened. However, the Chinese stimulus package has come in as a rescue to the falling markets."We maintain a bullish view on copper, aluminum and tin as fundamentally these metals are strong, while we remain bearish on zinc, lead and nickel from the long-term perspective," a metals expert said.