Commodities: IEA cuts oil consumption forecasts in August report
Posted on: 13 Aug 2012 by David Redford

A softer dollar may have encouraged investors to take a keener interest in gold on Friday, as they moved to anticipate further actions on the part of policy-makers around the globe.

Gold for December delivery climbed $2.60 to $1,622.80 in thin trading, as investors wondered whether more monetary stimulus is on the way from central banks worldwide, after Chinese data indicated the world’s second biggest economy is not rattling along at the pace it used to.

In July China saw exports rise just 1% compared to a consensus estimate of a rise of 8%. Imports, meanwhile, grew less than expected. The year-on-year rise was 4.7% versus market expectations of a 7.2% rise. When combined the result of the above was a trade surplus which narrowed from $31.7bn in June to $25.1bn in July.

In contrast to the yellow stuff, prices of other metals drifted lower. Copper for September delivery was off three cents at $3.39 a pound while the September silver contract fell four cents to $28.06 an ounce.

Neither did the softer dollar prevent the price of dollar-denominated oil from sliding, with the Chinese data again a factor in the decline, as was a new forecast on oil consumption from the International Energy Agency (IEA).

The IEA cut oil demand expectations for 2012 and 2013 by 300,000 to 400,000 barrels per day, according to its August Oil Market Report.

The agency said the change is due to ‘baseline data revisions and a weaker economic prognosis’. Despite this reduction in forecasts, the IEA still expects annual growth of 800,000 to 900,000 barrels per day with demand averaging 89.6m barrels per day in 2012 and 90.5m in 2013.

Oil for September delivery finished Friday 49 cents cheaper at $92.87 a barrel on the New York Mercantile Exchange.

JH

Tags: chinese data | commodities | consensus estimate | new york mercantile | oil consumption | oil demand | oil market report | ounce | prognosis | stimulus