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Financial Times: Crude oil lower as Dean threat lifts from Gulf

By Javier Blas
Published: August 21 2007 03:00 | Last updated: August 21 2007 03:00

Commodities prices were volatile yesterday, with some base metals rising on hopes that actions by central banks to add much-needed liquidity to the credit market would support the world economy and help demand for commodities to grow.

Energy commodities, however, moved lower as hurricane Dean, the first this season to threaten the Gulf of Mexico, was forecast not to hit US oil production and refineries in the area.

In late London afternoon trading, Nymex September West Texas Intermediate fell $1.50 to $70.48 a barrelwhile ICE September Brent dropped $1.22 to $69.22 abarrel.

Nymex September natural gas dropped 71.2 cents, or more than 10 per cent, to $6.304 per million of British thermal units.

Oil companies operating in the US Gulf of Mexico yesterday said they were beginning to restart production that was suspended.

Shell saw its crude oil production cut by about 39,000 barrels a day over the weekend as a result of the approaching hurricane.

However, traders said that oil prices could rebound if hurricane Dean caused damage to Mexican oil platforms.

Pemex, Mexico’s state oil company, on Sunday evacuated thousands of oil workers from the Cantarell oil field, the world’s third-largest, as the powerful hurricane was heading to the area.

It yesterday closed the Dos Bocas oil export port,shutting down about 330,000 b/d of crude oil exports.

Base metals recovered some of the losses from last week but prices remained volatile.

In late afternoon trading on the London Metal Exchange, copper rose0.9 per cent to $7,025 a tonne but aluminium lost 0.7 per cent to $2,478 a tonne.

Nickel fell 0.9 per cent to $26,025 tonnes. Tin jumped 5.2 per cent to $14,050 a tonne while lead rose 1.2 per cent to $2,920 a tonne.

CommerzBank said it was expecting the recovery for the metal sector to continue in the medium term.

Agricultural commodities were down even as hurricane Dean triggered fears that Jamaican coffee supplies would be damaged. ICE New York Board of Trade December Coffee lost 0.5 per cent to $1.189 per pound.

CBOT September wheat fell 6 cents to $6.66 a bushel while CBOT September corn moved lower 1¾ cents to $3.26¾ a bushel.

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