Oil Price Target Raised & Copper Going Ballistic
Three stories caught my eye this morning. I thought I'd share them...
#1 U.S. raises oil forecast $3 a barrel
The government Tuesday raised its forecast for the average price of oil in August by $3 a barrel, citing July's heat wave and decreased production from the closure of BP's oilfield in Alaska's North Slope. The Energy Information Administration (EIA), the numbers arm of the Energy Department, estimated in its monthly energy forecast that oil is expected to average $76.50 a barrel in August, up from its prior forecasts of $73.50.
[XX My comment: Better late than never. But their price could still be too low. On the other hand, maybe now that Britain is on a full-scale freakout over a terror alert, maybe airline travel will drop significantly and that will lower demand, sending prices lower.]
#2 Higher copper prices feared
With an already tight copper market pushing prices to record highs, a possible strike at BHP Billiton's (NYSE: BHP) massive Escondida mine in Chile and problems at several others could mean "very big things on the price side," observers say, because even a short-term disruption could put a strain on supplies.
[XX My comment -- Copper hit a three-week high in London this morning. Copper, zinc, nickel and other base metals' prices have been rising because of soaring demand from China and India. But demand is just part of the picture. Supply is tight. And it's not just labor costs. Old mines are getting worked out and new deposits are more expensive to mine (if they're there at all)]
#3 World Steel Prices Are Sliding
While North American steel prices continuing to rise slightly this month, world steel prices are sliding off cyclical July peaks in China, other Asian markets and the European Union. That's because offshore supply is beginning to outpace demand – especially in China, the biggest user and maker of the metal, which has turned from a net importer of the metal to an exporter. In fact, Business Week's Asia Online edition reports from Seoul that "the Korean steel sector is suffering from a glut of gargantuan proportions, thanks to a flood of exports from China."
[XX Wasn't it less than a week ago we heard that steel was on the upswing? Why yes, here's the story right HERE. So who's right? I don't know yet -- it's a story that bears watching.]
#1 U.S. raises oil forecast $3 a barrel
The government Tuesday raised its forecast for the average price of oil in August by $3 a barrel, citing July's heat wave and decreased production from the closure of BP's oilfield in Alaska's North Slope. The Energy Information Administration (EIA), the numbers arm of the Energy Department, estimated in its monthly energy forecast that oil is expected to average $76.50 a barrel in August, up from its prior forecasts of $73.50.
[XX My comment: Better late than never. But their price could still be too low. On the other hand, maybe now that Britain is on a full-scale freakout over a terror alert, maybe airline travel will drop significantly and that will lower demand, sending prices lower.]
#2 Higher copper prices feared
With an already tight copper market pushing prices to record highs, a possible strike at BHP Billiton's (NYSE: BHP) massive Escondida mine in Chile and problems at several others could mean "very big things on the price side," observers say, because even a short-term disruption could put a strain on supplies.
[XX My comment -- Copper hit a three-week high in London this morning. Copper, zinc, nickel and other base metals' prices have been rising because of soaring demand from China and India. But demand is just part of the picture. Supply is tight. And it's not just labor costs. Old mines are getting worked out and new deposits are more expensive to mine (if they're there at all)]
#3 World Steel Prices Are Sliding
While North American steel prices continuing to rise slightly this month, world steel prices are sliding off cyclical July peaks in China, other Asian markets and the European Union. That's because offshore supply is beginning to outpace demand – especially in China, the biggest user and maker of the metal, which has turned from a net importer of the metal to an exporter. In fact, Business Week's Asia Online edition reports from Seoul that "the Korean steel sector is suffering from a glut of gargantuan proportions, thanks to a flood of exports from China."
[XX Wasn't it less than a week ago we heard that steel was on the upswing? Why yes, here's the story right HERE. So who's right? I don't know yet -- it's a story that bears watching.]
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posted by Sean Brodrick @ 7:47 AM
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