Daily FNArena News - Commodities

OPEC comments gave traders little reason to stay long oil and the price has fallen in response but Barclays Capital suggests the uptrend remains intact.

National Australia Bank’s latest survey of the mining sector shows labour costs as the greatest issue for companies but profits are expected to remain historically high.

A slowing economy on the back of the sub-prime crisis means the US no longer leads the world in base metal consumption, but an expected pick-up in coming months keeps Barclays positive on the sector.

Barclays Capital expects lead prices will re-test recent highs and remain strong in the medium-term thanks to a structurally tight market.

Ux Consulting has left its weekly U3O8 spot price indicator unchanged at US$120/lb.

No consensus exists between the two industry consultants that each set their weekly spot price indicator with TradeTech refusing to copy last week’s heavy price cut by Ux Consulting.

It seems the planets are beginning to align once more for those who have had their patience sorely tested – the gold bugs.

Barclays Capital has reviewed the performance of commodity markets for the last quarter and concludes oil and base metals should go higher while gold looks like moving sideways.

Oil prices are again near their highs of this time last year but according to Commonwealth Bank the difference is OPEC can lift production and boost supply.

Wednesday night’s CPI result in the US should provide a clue to the next move in gold as the US dollar threatens to truly collapse.