Nickel continued its record-breaking run Thursday and copper rose strongly but crude oil fell after the Organisation of the Petroleum Exporting Countries agreed to keep production levels unchanged.
ICE April Brent oil, which expired Thursday, fell 48 cents to $61.58 a barrel while May Brent retreated 51 cents to $60.78. Nymex April West Texas Intermediate dipped 2 cents to $58.14 a barrel.
Ali al-Naimi, Saudi Arabia’s oil minister said there was no need for Opec to cut output further as the two previous cuts, totalling 1.7m barrels a day, were “good and appropriate”.
“The state of the market is comfortable and there is no need to change output,” said Mr al-Naimi.
Edward Meir of Man Financial estimated that half of the cuts had been implemented. “The true test for [the effectiveness of] Opec’s cuts lies just ahead, as the seasonally weak second quarter starts and weather will no longer work in the cartel’s favour,” he said.
Opec raised its forecast for global oil demand growth this year by 0.1m b/d to 1.3m b/d, an increase of 1.5 per cent over 2006. Opec also said it expected demand for the cartel’s crude to average 30.4m b/d this year, up from a previous estimate of 30.25m b/d.
Kevin Norrish of Barclays Capital said: “The market has already been overtightened and there is enough pressure on inventories not just to defend current prices but to push them higher.”
Natural gas prices eased after the latest weekly inventories data showed stocks declining 115bn cubic feet, bang in-line with market expectations. Nymex April Henry Hub eased 7 cents to $7.010 per million British thermal units.
Nickel’s extraordinary run continued as it surged to a record $47,700 a tonne before easing back to $47,100, up 5.1 per cent on the day. A move towards the $50,000 level is widely anticipated as critically low and declining inventories means the path of least resistance appears to be upwards.
Copper jumped 5.3 per cent to $6,550 a tonne, supported by a fall of 1,625 tonnes in LME stocks, which stand at a two-month low. Chinese production of copper concentrate has fallen sharply since December but buyers are returning to the market after the Lunar New Year holidays. China imported 174,093 tonnes of refined and anode copper and copper alloy in February, a record, and imports in the first two months of 2007 have more than doubled compared to the same period last year.
Tin rose 2 per cent to $13,765 a tonne while lead added 2.1 per cent at $1,915 a tonne.
Gold inched up 0.5 per cent to $646.70 a troy ounce, consolidating after recent volatility.
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