Australian commodity stocks face another tough day after gold, copper, silver and oil prices fell overnight Thursday.
The 9% plus slide on Wall Street on Thursday will add to the pressure on the share prices of leading Australian commodity companies when ASX trading re-opens this morning.
But iron ore prices held up, rising 75 US cents in Asia to end at $US90.75 for 62% Fe fines delivered to northern China.
It was a day of surprising strength for the commodity after Wednesday’s slide and given Thursday’s chaos and volatility in global share and money markets.
But that steadiness won’t help the likes of BHP and Rio where investors have been blindly selling this week.
Thursday saw BHP and Rio Tinto, fall 7.7% and 6.4% respectively to $26.33 and $77.40, Woodside Petroleum slumped 9.1% to $19.09, Oil Search dropped 10%, Santos nearly 8% and Fortescue Metals 6.5%.
Overnight Thursday, commodity prices were jittery all day as signs of liquidity freezing emerged as the ripples from President Donald Trump’s ham-fisted ban on European travel to the US in his address on Wednesday night, whacked markets from the get-go.
Oil futures finished sharply lower Thursday, with Brent, the global benchmark suffering a loss of more than 7% in the wake of the Trump ban.
Among energy futures, gasoline (petrol) took the biggest percentage hit, with prices down over 19% and settling below $US1 a gallon, their lowest since 2008.
West Texas Intermediate crude for April delivery lost $US1.48, or 4.5%, to settle at $US31.50 a barrel in New York, while May Brent futures in Europe tumbled $US2.57, or 7.2%, to $33.22 a barrel and narrowed the price differential between the two crudes to its smallest in years.
Crude oil was also pressured by the ripples from Saudi Arabia’s Wednesday another salvo in its price war with Russia by moving to expand production capacity. At the same time OPEC and the International Energy Agency this week cut their forecasts for global oil demand in 2020.
Comex gold for April delivery fell by $US52, or 3.2%, to settle at $US1,590.30 an ounce, its third straight session decline.
May silver lost 77.1 US cents, or 4.6%, to $US16.005 an ounce, for the lowest most-active contract finish since July of last year.
Comex May copper lost 1.2% to settle at $2.4725 a pound, with prices on track for an almost 4% loss on the week.
Prices for gold, however, finished off the session’s intraday low $US1,560.40, after the US Federal Reserve stepped in with an immediate liquidity injection of $US1.5 trillion.
The New York Fed Thursday afternoon announced the injection (in three tranches on Thursday and Friday) to address “highly unusual” disruptions (a liquidity freeze) in Treasuries (bond and note) markets.
