Commodities Report: June 18, 2010 – Oil Falls on European Jitters, Gold Climbs Closer to Record High

Posted by admin on June 24th, 2010 filed in Gold against Oil

Oil continues to fall in early morning trading, as the euro fell against the greenback and worries about sovereign debt in Spain, Portugal, and Italy continue to weigh investors down. The European Union’s agreement to disclose how banks in the region perform on stress tests has also weighed down on energy demand. 

Gold, on the other hand, is climbing ever closer to its record of $1,251.20 an ounce reached last week as its allure as a safe haven regains momentum. An unexpected increase in U.S. weekly jobless claims as well as weaker-than-expected manufacturing data too have increased the attractiveness of alternative assets. 

At 0755 ET, Brent crude is down 1.6% to $77.41 an ounce, while light sweet crude is down 1.2% at $75.91 an ounce, and natural gas is nearly flat at $5.16 a million British thermal units. 

Gold is up 0.1% to $1,249.90 an ounce, while silver is unchanged at $18.78 an ounce, and copper is 1.5% weaker at $2.86 a pound. 

BP plc (BP) is up over 2.8% to $32.62 on the NYSE pre-market, following CEO Tony Hayward’s face-off with legislators on Capitol Hill Thursday. Hayward denied accusations from House members that the company deliberately cut costs that jeopardized safety standards at its wells. 

As for Australian resources giant BHP Billiton Ltd (BHP), it could spend as much as $20 billion to acquire Gulf of Mexico assets including BP’s holdings that may come up for sale, according to Cigitroup. Analyst Clarke Wilkins told Bloomberg that BHP may be able to acquire assets held by BP and smaller companies operating in the region as tougher regulation drives up costs. 

In Afghanistan, there is speculation that mineral deposits in the country may be up to $3 trillion, three times more than what the Pentagon had estimated earlier this week, according to Afghan mining minister Waheedullah Shahrani.

Duration : 0:2:29

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