Oil drops below $69

Oil prices dropped below $69 (U.S.) a barrel Monday, hurt by a rise in the U.S. dollar, which tends to weigh on commodities, and a slide in regional stock markets.

By midday in Europe, Benchmark crude for October delivery was down 59 cents to $68.70 a barrel in electronic trading on the New York Mercantile Exchange. On Friday, the contract tumbled $2.65 to settle at $69.29.

Oil prices have fallen about $4 in the last two trading days as the dollar rebounded off its lows of the year last week. Oil is priced in dollars so it becomes more expensive when the U.S. currency gains.

The euro fell Monday to $1.4538 from $1.4594 on Friday, the British pound fell to $1.6539 from $1.6687 and the dollar rose to 90.80 Japanese yen from 90.57 yen.

Copper falls to near two-week low

LONDON - Copper dropped to its lowest in almost two weeks on Monday and dragged other base metals to multi-week lows as the U.S. dollar gained broadly and weighed on all commodities while demand worries persisted.

Nickel and Aluminum fell to their lowest in nearly seven weeks, while zinc dropped to a two-week low and lead was at a 2-1/2 week low as the U.S. dollar rose against a basket of currencies.


The dollar's rise weighed on other commodities such as gold and oil, as a stronger U.S. currency makes dollar-denominated raw materials more expensive for local currency holders.


Copper for three months delivery on the London Metal Exchange fell to $6,070 (U.S.) a tonne, its lowest since September 2 and was at $6,114.75 a tonne by 0855 GMT, versus Friday's close of $6,250 a tonne.


"One of the key factors that has been driving copper is the dollar," said mining analyst Charles Kernot at Evolution Securities. "The other is the world economy."

Copper inventories added another 1,475 tonnes on Monday to 319,800 tonnes, with all of the rise coming from Asian warehouses. Stocks have risen nearly 25 per cent since July, reflecting the weak demand situation.


"The Chinese are sitting on a glut of copper right now, so their copper premiums are a lot cheaper than what LME brokers are offering," said Mr. Sharma, adding that the Chinese are quoting a premium of $50, free on board (FOB), less than half of the $125 premium offered by LME brokers.


Aluminum fell to $1,802 a tonne, its lowest since July 30 and was last at $1,811 a tonne versus $1,845 a tonne on Friday.

Zinc dropped to $1,796.50 a tonne, its lowest since September 2 and was at $1,809 from $1,865.

In industry news, Belgium's Nyrstar, the world's biggest producer of zinc, said it had agreed to buy a zinc mine complex in Tennessee from the Glencore Group for $126-million.

Battery making material lead fell to $2,025 a tonne, its lowest since August 27 and was at $2,050 a tonne versus Friday's $2,065.



Nickel, Steel making ingredient was at $16,580 a tonne versus $16,950 a tonne.

Tin was lower at $14,100 from $14,400.

	24 Hour Base Metals