From now on oil prices will start coming closer to their 2008 levels.
Another bout of weakness last week means that prices are now turning lower this year in a big way.
But sometime towards the end of the year the 2009 price will be higher than the 2008 price because of the sharp slump under $US40 a barrel in the late months of 2008.
World oil prices peaked a year ago Saturday (July 11) at $US147.27 a barrel in New York and then started their long tumble.
That fall accelerated when Lehman Brothers collapsed in mid-September.
Friday’s New York close of $US58.59 was down 52 cents on the day, but it was at the end of the biggest weekly fall since late January.
The fall over the week was 10% and the oil price fell on six of the seven trading sessions ending Friday.
Not helping Friday was the latest survey of US consumer sentiment showing a big fall for July to the lowest level since March, when the current rebound started.
That added to the questioning about the state of the economy and the demand for commodities.
The monthly report from the International Energy Agency forecast demand would continue to fall in 2009, before rising 1.7% in 2010 as global economic activity picked up, especially in emerging economies such as China and India.
Gold also weakened as the US dollar was stronger and lower oil prices eroded confidence in the sustainability of the recent recovery. US bond yields are down around 3.3% now for the 10 year security as investors look for a bit of safety.
New York gold futures fell 2% for the week, the second weekly decline.
August Comex gold futures dropped $US3.70 to $US912.50 an ounce on Friday. Last week’s fall was the fifth weekly drop in the past six weeks.
Spot gold in London fell 45 cents to $US911.90 an ounce.
Copper prices fell, capping a second weekly drop,
Shipments of copper and related products into China rose to 475,999 tonnes in June, topping a May record, according to government figures.
Comex September futures fell 2.6 cents, or 1.2%, to $US2.2115 a pound in New York.
That left the price for the current contract down 4.1% over the week after the small 0.2% drop the week before.
On the London Metal Exchange, three month metal fell $US37 Friday to $US4,858 a tonne, or $US2.20 a pound.
LME aluminum slipped 0.8% to $US1,572 a tonne; lead lost 1.8% Friday to $US1,596; zinc 2.4% to $US1,493 a tonne; tin dropped 4.8% to $US12,000, and nickel fell 2.8% to $US14,490.
In Chicago, positive news on US grain plantings and possible harvests left markets mixed.
The USDA said corn, soybean and wheat stockpiles will be higher than forecast last month after plantings estimates rose in the latest crop assessments.
The Department estimated that about 1.55 billion bushels of corn will be in storage at the end of the crop year in August 2010, up 42% from 1.09 billion forecast in June.
Soybean stockpiles will total 250 million bushels, up 19% from last month’s estimate of 210 million bushels.
Wheat supplies on May 31, 2010 (the end of the sales year) will total 706 million bushels, up 9.1% from the June forecast,.
The USDA on June 30 boosted its estimate for corn to 87 million acres, from a March forecast of 85 million; soybean acreage was put at 77.5 million, up 2.3% from March, and wheat plantings were estimated at 59.8 million acres, up 2%.
The increased acreage estimates saw the USDA lift its production forecasts for the three crops.
The coming corn harvest will total 12.29 billion bushels, 3% higher than estimated last month; the soybean crop will be 3.26 billion bushels, 2% than previously estimated and the US wheat crop will be 2.112 billion bushels, 4.8% more than forecast last month.
The winter-wheat crop now being harvested will total 1.525 billion bushels, up 2.2% from 1.492 billion forecast in June.
