Commodities saw choppy trading on Thursday as investors remained cautious after the sharp falls of the past week.
Oil prices typified the trend. IPE Brent crude for July delivery gained 1 cent to $69.05 a barrel in late afternoon London trade but the small move masked an intra-day swing of about $1.20. West Texas Intermediate for June delivery added 16 cents to $68.85 a barrel in early afternoon New York trade. But it is still almost 5 per cent down on the week.
The American Automobile Association said on Thursday that it expected the number of people travelling on Memorial Day weekend, at the end of the month, to rise by the smallest amount in four years. The holiday weekend marks the start of the US summer driving season, a period when US petrol consumption reaches a peak.
The AAA said the weaker rise reflected higher petrol prices with drivers expected to pay about 75 cents more for a gallon than they did last year.
Gold succumbed to a late sell-off, dropping $8 to $682.80/$683.60 a troy ounce.
There was similar turbulence in the base metals markets, where copper fell $30 to $8,090 a tonne on the London Metal Exchange, after spending most of the session in positive territory.
The International Copper Study Group said on Thursday that copper consumption for the first two months of the year fell 0.5 per cent, following a fall of 5.2 per cent in Chinese usage, 4.7 per cent for the European Union and 3.4 per cent for the US during the period.
However, copper production was constrained by technical problems, strikes and lower than expected head-grades of copper ore.
Increases in supply from Australia, Congo, Peru and Zambia were balanced by lower output in Brazil, China, Indonesia, Kazakhstan, Mexico and the US, and unchanged output from Chile, the world’s largest producer.
The ICSG said this resulted in a surplus of 52,000 tonnes in the month of February, making a cumulative surplus for the first two months of the year to 117,000 tonnes.
This compared with a deficit of 55,000 tonnes for the same period last year.
The copper statistics group said that at the end of April, copper inventories held in warehouses registered with the London Metal Exchange, Comex and the Shanghai Futures Exchange totalled 164,209 tonnes, down 20,573 tonnes on the month.
It said inventories held by producers, consumers and exchanges totalled 930,000 tonnes, down 7,000 on the month.
Analysts are predicting that production will not keep up with demand in the April to June period.