Commodities Sector Report: June 24, 2010

Jun 24, 2010 -- Oil is weaker in early morning trade as U.S. crude inventories rose, while the Federal Reserve's worries about the European sovereign debt crisis affecting the U.S. economy has renewed concerns about global economic prospects. A slump in equities markets worldwide has dampened energy demand across the board.

Gold is losing ground too on profit-taking, and many investors are selling off the yellow metal to cover losses in other markets. Mining shares are broadly higher, however, with hopes high that a change in Australian government leadership will lead to a scrapping of the 40% mining tax that had been planned under Kevin Rudd's Labor rule. Australia is home to some of the world's biggest mining companies including Rio Tinto Inc (RIO) and BHP Billiton Inc (BHP).

At 0750 ET, Brent crude is down 0.6% at $75.84 a barrel, while light sweet crude is 0.2% weaker at $76.21 a barrel, and natural gas is down 0.3% at $4.79 a million British thermal units.

Gold is 0.1% weaker at $1,234.70 an ounce, while silver is 0.3% lower at $18.41 an ounce, and copper is up 0.9% at $2.96 a pound.

The U.S. government, meanwhile, has appealed U.S. District Judge Martin Feldman's order not to enforce the moratorium on deepwater drilling. The New Orleans federal judge said that the moratorium imposed after the BP plc (BP) disaster in the Gulf of Mexico was too broad.

In Russia, OAO Lukoil (LKOH) does not expect ConocoPhillips (COP) to completely sell out of the company despite the U.S. group's move to halve its stake in Lukoil, according to daily Kommersant. Conoco said it would halve its 20% stake in Lukoil within the next three years, but CEO Vagit Alekperov told the daily that it was unlikely that Conoco would sell off its remaining 10% sharehold.

PetroQuest Energy Inc (PQ) cut its production outlook for the second quarter due to unexpected shut-ins at two of its fields and the sale of stake in Woodford shale assets.

The government of Guatemala decided to suspend mining operations in San Miguel Ixtahuacan, but Goldcorp Inc (GG) continues to operate the mine. CEO Chuck Jeannes said that there was no basis for suspending operations, even though the Organization of American States has ordered Guatemala to suspend operations at the mine by June 24 for violating human rights and environmental destruction.

Category:

News & Politics

Tags:

• commodities
• oil
• RIO
• Rio
• Tinto
• BHP
• BP
• LKOH
• PQ
• GG
• COP
• stock
• market
• news

[etznab583]

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