SUMMARY Crude oil prices touched new highs and surpassed US$82 a barrel during the week on news of a cut in interest rates by the Federal Reserve to boost the US economy. Naphtha spiked in line with robust crude prices. EDC and VCM prices continued their downward trend due to bearish downstream demand. Ethylene prices dropped on account of weaker demand from downstream PE manufacturers that weighed down increasing supply. Propylene prices dropped on quiet market conditions. Despite a quantum jump in upstream benzene prices, styrene monomer prices dipped by over thirty dollars this week.HDPE, LDPE, LLDPE and PP markets stagnated as damp market conditions continued to prevail. PVC prices dropped as markets remained slightly toned down on dismal demand from China. GPPS and ABS prices climbed along with rising feedstock prices. CRUDE OIL 79.1 81.62 Oil prices closed at US$81.62 a barrel in the week of September 24, 2007 for November contract on the Nymex. During the week, oil prices touched new highs and surpassed US$82 a barrel on news of a cut in interest rates by the Federal Reserve to boost the US economy. The Federal Reserve announced a cut in key interest rate to 4.75%, twice of what most economists expected. Later in the week, prices slipped, but firmed up around record levels as the market was wary of potential looming tropical storm off the west coast of Florida. This resulted in temporary closure of about 25% of the Gulf of Mexico's daily oil production, providing an extra boost to the oil market's already strong run in view of tight crude inventories. However, the actual drive behind the rally is an influx of speculative "nontraditional" capital into energy commodities, an inflow that increases when the dollar falls.
Wednesday, September 26, 2007
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