But global financial mess means consumers will pay even less to fill up Oil and metals prices tumbled yesterday and two key commodity indexes sank again — a hint of what’s to come, analysts say, as investors brace for earnings reports from resource companies next week.
While the impact of the global financial crisis will kick in more fully in the fourth quarter,
“Most of what’s gone on has really been
Falling commodity prices have an upside for consumers, particularly motorists who welcome lower costs at the pump. Gas prices in the GTA are set to drop below $1 per litre today, according to a website operated by Dan McTeague, the
Base metals giant Teck Cominco Ltd., a top zinc producer, kicks off the earnings parade next Wednesday, with EnCana Corp., Canada’s biggest oil and gas producer, following on Thursday. Both companies have suffered lately through a big downturn in zinc and oil prices.
“Probably nickel and zinc producers will start seeing the effects first since those prices got hit first, and the others will follow,” noted Allan. “So stay tuned.”
Teck closed the Lennard Shelf
Rough times are hitting the oil patch, too. EnCana this week suspended plans to split into separate oil and gas companies, citing volatility in global financial markets.
Yesterday, the price of oil slid to a 14-month low of under $70 (U.S.) a barrel — less than half its July peak of $147.27 — after the U.S. government reported massive increases in U.S. crude and gasoline supplies.
Light, sweet crude for November delivery fell $4.69, or 6.2 per cent, to settle at $69.85 a barrel on the New York Mercantile Exchange.
Spot gold fell $34 to close at $801.50 in New York yesterday.
“You don’t have a 700-point drop in the Dow that is not followed by margin- call liquidations,” explained Jon Nadler, a senior analyst at Kitco Metals & Minerals Inc. in Montreal, referring to Wednesday’s stock market
Canada’s big gold guns are preparing to release results — Barrick Gold Corp. on Oct. 30 and Goldcorp Inc. on Oct. 31 — after watching gold tumble from an
Yesterday, BMO Capital Markets released its Commodity Price Index, which fell 7.8 per cent last month.
Metal prices have sunk sharply since September. Copper, which sold for $3.17 in September, has fallen to about $2.09 a pound. Zinc has dropped to about 54 cents from 79 cents a pound. And nickel has slumped to about $5 a pound from $8. 07 in September.
The Baltic Dry Index, which tracks transport costs on international trade routes, fell 109 points, or 6.8 per cent, to 1,506 points in London yesterday, its lowest in almost six years, on concerns turmoil will sap demand for raw materials. The index has dropped 87 per cent since a May record of 11,793 points.