Another rough night for iron ore and oil which means downward pressure on the prices of local energy and iron or producers, led by Woodside and BHP Billiton.
Crude-oil prices finished at their lowest in three years, as prices in the US and Europe fell by around 2% in the aftermath of Saudi Arabia’s decision to discount oil prices for US and Asian buyers, while spot iron ore prices dipped to a new five year low overnight on weak demand.
New York Light, sweet crude futures for delivery in December fell $US1.59, or 2%, to settle at $US77. 19 a barrel, the lowest settlement for a front-month contract since October, 2011.
US oil prices have ended lower for the last four sessions in a row, down 6.1% over the period. US energy shares have lost nearly 7% in the five weeks of the current quarter, so far. They are the biggest losers in the S&P 500 index in the current half of 2014.
In London, December Brent crude fell to a four-year low overnight Tuesday. The December contract fell $US1.96, or 2.3%, to end at $US82.82 a barrel , the lowest settlement for Brent since October, 2010.
Brent has also closed lower for four sessions in a row, losing 5% during the period.
Oil prices are down 25% since their peaks in June. Iron ore prices are now down 40% since the start of the year.
The benchmark iron ore price for immediate delivery to the port of Tianjin in China wast $US77.10 a tonne, down 0.9% from its previous close of $US77.80. The previous five year low was $US77.50. The price has retreated from above US80 a tonne in the last two weeks.
The US dollar index reached a four year high in New York in early trading, but weakened during the rest of the day. That helped the Australian dollar push back over 87 US cents to around 87.35 this morning, up around almost a cent on the day’s low in Asian trading of around 86.46 US cents.
Gold dipped to around $US1, 167 an ounce, the Dow edged higher, the S&P 500 and Nasdaq eased, and our market will start flat this morning.
