Research Dept. News
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Monthly Report, num 350 - October 2011
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International review - Commodities
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Following lower expectations
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Oil falls to 106.60 dollars due to fears of a double dip recession in advanced economies.
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The price of crude remained stable between 22 August and 27 September, down 0.9% which placed it at 106.60 dollars per barrel (Brent quality, for one-month deliveries), 15.1% above its level at the start of the year and 37.3% above last year's level. Although this drop is small, we should note that oil prices had risen up to 20 September by 4.3%.
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This drop in oil prices, and in the rest of commodities, should be seen within the context of less global growth, particularly in the United States and Europe. Political unrest in North Africa and the Middle East, difficulties in supply and also the continuing growth of emerging economies, which are more energy-intensive, have delayed a moderation in prices. Crude is unlikely to fall below 100 dollars per barrel before the end of the year but, at present, the most likely risks would result in a downward trend.
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Metals far further than foods.
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Falls predominate in the rest of commodities, resulting from the downward revision of expectations. The CRB commodities index lost 4.8% between 22 August and 27 September. Base metals, which are closely related to economic growth, fell across the board. Particularly of note were the 12.9% drop in copper and the 9.0% drop in nickel, as well as the abrupt end to the upswing in silver and falls in the rest of the precious metals. The drop in gold is significant, not taking advantage, this time, of the prevailing uncertainty, perhaps suffering from vertigo. This precious metal fell by 12.2%, reaching 1,655 dollars an ounce, when at the beginning of September it had gone above 1,900 dollars intraday. The drops in foods were less unanimous, such as the fall in wheat and sugar prices combined with rises in barley and rice.
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