Oil, gold take huge beating

 By GYNNIE KERO

THE price of commodities such as oil and gold have taken a worse than anticipated beating in recent weeks, according to the PNG Chamber of Mines and Petroleum.

President Gerea Aopi on Monday said crude oil prices had fallen to around US$70 (K183) a barrel for the first time in four years and gold just below US$1200 (K3148) an ounce at a four- year low.

He said China’s outlook is affecting copper demand and pricing.

Aopi said all these were Papua New Guinea’s critical export commodities especially since exploration and development activity was putting an additional shine on the prospect of kick-starting the Gulf LNG project.

The current volatility in the prices of crude oil at the international market followed the refusal by Organisation of Petroleum Exporting Countries (OPEC) to cut output, despite what is seen as a supply glut.

As a result, brent price keeps falling until last night it slipped toward US$72 (K188) a barrel.

Brent crude is a major trading classification of sweet light crude oil that serves as a major benchmark price for purchases of oil worldwide

Saudi Arabia’s Oil Minister Ali al-Naimi said cutting crude output would depress prices and undermine the profitability of North American producers.

OPEC’s secretary general Abdullah al-Badri confirmed the organisation was entering a battle for market share.

The body said it reviewed the oil market outlook, as presented by the secretary general, in particular supply/demand projections for next year, with emphasis on the first half of 2015.

OPEC noted that the global economic recovery was continuing with growth forecast at 3.2% for 2014 and 3.6 % for 2015.

Although world oil demand was forecast to increase next year, it would be offset by the projected increase of 1.36 million barrels per day in non-OPEC supply.

In the interest of restoring market equilibrium, the OPEC decided to maintain the production level of 30 million barrels per day.