Base Metals Weigh Down on Poor US Consumer Confidence Data

Rising tensions with respect to Euro Zone debt worries, with Greece being the matter of concerns coupled with mixed sentiments in the global markets led base metals pack to trade lower on the LME last week.

In addition to this, strength in the US dollar and weak consumer confidence data from the US also acted as a negative factor for metal prices.

However, depreciation in the Indian Rupee (INR) cushioned further losses on the domestic bourses in the last week.

On a weekly basis, the INR depreciated around 1.5 percent and closed at the level of 49.35 on Friday.

Lead

On a weekly basis, lead was the worst performer in the last week, as the metal declined sharply by almost 4 percent on the LME.

Sharp rise in LME as well as Shanghai lead inventories and strength in the US dollar acted as a negative factor for the metal prices.

Lead inventories on the LME warehouses last week increased sharply by 1.9 percent to 382,600 tonnes on 10th February 2012 from the previous level of 375,300 tonnes on 3rd February.

Additionally, weekly Shanghai inventories of the metal rose sharply by 21.3 percent to 36,354 tonnes last week. MCX Lead February contract touched a low of Rs105.6/kg and ended its trading session at Rs105.95/kg last week.

Crude oil edges higher on Euro economic concerns

On a weekly basis, Nymex crude oil prices increased by 0.9 percent, taking cues from low temperatures In Europe which created demand expectations for the commodity.

Additionally, supply concerns from Iran still persists which also acted as a supportive factor for crude oil.

Oil prices touched a high of $100.18/bbl during the week and closed at $98.7/bbl on Friday. On the MCX, prices increased by 3.5 percent on account of Rupee depreciation and closed at Rs.4905/bbl after touching a high of Rs.4958/bbl last week.

Crude Oil News

The International Energy Agency (IEA) has cut the global oil demand by less than 1 percent for the year 2012. The agency has cut its demand growth forecast by 250,000 barrels per day (bpd) to 800,000 bpd.

Apart from the cuts in demand forecast, the Organization of the Petroleum Exporting Countries (OPEC) oil supplies increased in January at 30.9 bpd which is highest since October 2008. Also the International Monetary Fund (IMF) economic report expects the world economy to expand at 3.3 percent in 2012 from earlier assumption of 4 percent.