Oil, metals down

WEAK energy demand continues to weigh down oil prices with the US Energy Information Administration reporting a 1.8 percent drop in refinery activity to its lowest level in at least 20 years, barring occasional periods of hurricane-related refinery outages reports PNG Industry news.

Options Express senior commodities analyst Mike Zarembski told Dow Jones Newswires refineries did not want to produce when demand was lacklustre and the money was not there.

The refinery rate overshadowed a 400,000 barrel dip in US crude inventories and a 3.3 million barrel drop in distillate stocks, including heating oil and diesel.

Oil was also affected by US President Barack Obama's proposal to limit the size of financial institutions and prevent commercial banks from engaging in certain investment activities, including owning hedge funds and proprietary trading.

Singapore's Tapis crude closed down from $US79.58 (K210.95) per barrel on Wednesday to $79.06 (K209.60)/bbl on Thursday.

Meanwhile, copper dropped off overnight to its lowest level this year.
The red metal was trading at $7250.75 (K19,220) per tonne on the London Metal Exchange, its lowest price since December 29.

Earlier this week, traders were expecting copper to bounce back over $7500 (K19,880.70)/t but concerns that China may tighten its monetary policy pushed the metal downwards.

However, Macquarie Bank expects copper imports to China to reach up to 850,000t this quarter, compared with 620,000t in the last quarter of 2009.

It was a similar story for gold this week, with the precious metal trending lower.
Gold opened the week at $1130.50 (K2,997) per ounce on the Comex division of the New York Mercantile Exchange, but closed at $1103 (K2,924)/oz overnight.

Spot gold dipped below $1100 (K2,916)/oz, closing at $1096(K2,905)/oz overnight.
Despite hurting other commodities, Obama's plans are expected to boost the price of gold.

"We believe that gold prices are likely to recover, based on loose US monetary policy, no significant change in gold lease rates, and expectations of still-strong global commodity demand," HSBS analyst James Steel told Dow Jones.