Commodity prices retreat on eurozone, China woes

London, May 11: Commodity prices were mostly lower this week on renewed eurozone debt worries following political upheaval in Greece and France, and following disappointing economic data from China, traders said.

Prices won some late support from better-than-expected US inflation and consumer sentiment data. Oil prices fell for much of the week on heightened eurozone debt worries and disappointing Chinese economic data. Some found support today from the International Energy Agency's latest monthly report, which raised slightly its outlook for oil demand growth this year and warned that risks of a shock from Iran persisted.

But generally prices retreated on "the fragile economic conditions in the eurozone and the weaker economic data from China," Sucden brokers analyst Myrto Sokou said. Brent crude struck a four-month low of USD 110.53 on Tuesday before pulling back to finish slightly higher over the week. New York oil meanwhile hit a four-month trough of USD 95.17 on Wednesday.

"We continue to expect crude oil prices to trade sideways to lower," said Sokou. "The reasons being there is no real fresh optimistic news about the situation in the eurozone ... It looks like the generally (negative) sentiment will be further confirmed next week," she added.

Elections in France and Greece last Sunday turned on calls for the stress to be changed to growth from the tough austerity policies adopted to deal with the eurozone debt crisis which have dampened the economy.

AFP