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Petroleum industry

Copper Prices Plummet Amid Global Growth Worries and Middle East Unrest

Strategic Insights

— 1 min read

Copper prices tumbled to three-week lows on Tuesday as concerns over global growth intensified due to escalating violence in the Middle East, which sent oil prices soaring. The most actively traded copper contract, for March delivery, fell 13.5 cents, or 3%, to settle at $4.3470 a pound on the Comex division of the New York Mercantile Exchange. The Libyan leader, Col. Moammar Gadhafi, violently cracked down on protests in the major oil-producing state, causing oil output to be shut down, and sparking widespread global protests.

Key Takeaways:

  • Copper prices hit three-week lows as concerns over global growth intensified due to Middle East unrest, with the March contract falling 13.5 cents, or 3%, to $4.3470 a pound.
  • The unrest in Libya, a major oil-producing state, caused around 50,000 barrels a day of oil output to be shut down, with reports suggesting the death toll reached 300.
  • Many from Col. Gadhafi's own regime have reportedly resigned, and the Libyan nation's oil reserves hold a significant proportion of Africa's total oil reserves.
  • The International Energy Agency estimated that around 50,000 barrels a day of oil output were shut down due to the unrest in Libya.
  • Copper is widely used to make wires, pipes, and sheets for electronics, buildings, automobiles, and appliances, and its price was also pressured by rising oil prices and a proxy on the wider economy.
  • Copper inventories continued to rise, with London Metal Exchange warehouses seeing an increase of 275 metric tons on Tuesday, leaving them at 411,750 metric tons.

Statistics:

  • Copper prices fell 13.5 cents, or 3%, to settle at $4.3470 a pound on the Comex division on Tuesday.
  • Oil prices surged 5.8% to $91.20 a barrel on Nymex.
  • Libya's oil reserves hold around 1.7% of the world's crude output.
  • Around 50,000 barrels a day of oil output were shut down due to the unrest in Libya, according to the International Energy Agency.
  • Copper inventories in London Metal Exchange warehouses rose by 275 metric tons on Tuesday, leaving them at 411,750 metric tons.

Sources:

  • Dow Jones Commodities News via Comtex
  • Lind-Waldock
  • MF Global
  • International Energy Agency
  • Dow Jones Newswires

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