LONDON/SINGAPORE
Eric Onstad and Manolo Serapio Jr.
RTGAM
LONDON/SINGAPORE - Commodities spiralled lower again on Friday with crude oil sliding a further $5 as concerns over a slowdown in global growth sent traders rushing for the exit for the seventh successive session.
Crude oil again suffered the deepest losses amid widespread selling of silver, industrial metals and grains as worries over global growth in a market ripe for profit taking combined to cause a widespread rout.
Brent crude tumbled as much as 5.1 per cent to a low of $105.15 per barrel. Unrest across Arab nations had helped spur investors to pile into oil since the start of the year, driving Brent to a 2-1/2 year high of $127 last month.
Brent has lost more 12 per cent alone since Wednesday's close, the biggest two-day fall since the global financial crisis over two years ago "People are waking up to a whole new world. This is part of the adjustment process," said Jonathan Barratt, managing director of Commodity Broking Services in Sydney.
"The volatility will stay with us for some time."
Brent fell by a record $12 at one point during Thursday's bloodbath, the second biggest drop on record.
U.S. crude also lost over $5 to a low of $94.63.
"From here I would expect some form of stability, trading sideways maybe, but if we break through the lows of last night I think we're definitely looking at $90 and possibly worse," Sean Corrigan, chief investment strategist at Diapason Commodities Management in Switzerland, said.
Silver was down as much as 2 per cent to $34.23 an ounce while gold retained its safe-haven status, rising nearly one per cent.
Some pointed to silver, which dropped almost $5 an ounce on Thursday for its biggest one-day drop since 1980, as showing the risks of holding frothy commodities, especially after margins on trading COMEX silver futures have risen so sharply.
Silver hit a record high just last Thursday close to $50 but has since slumped almost 30 per cent, an uncomfortable reminder of the panic selling in 1980 when an attempt to corner the market by two Texas oil tycoons fell apart.
Jitters over global economic growth was the spark for the commodities selloff that pushed the 19-commodity Reuters-Jefferies CRB index down 5 per cent on Thursday for its fifth biggest one-day fall on record.
Investors shifted their focus to U.S. jobs data due later on Friday to gauge if concerns over the health of the world's biggest economy are misplaced or not.
Global manufacturing growth eased in April, JP Morgan said, and the services sectors in both the United States and Europe cooled, adding to data that suggests some faltering in the world's recovery from the global financial crisis.
Fears about a slowdown in economic growth and tightening in the biggest metals consumer China hit coppper and other industrial metals again.
Three-month copper on the London Metal Exchange gave up nearly 1 per cent to $8,730 a tonne, zinc shed 1.6 per cent and tin fell 2.1 per cent.
Copper's weak fundamentals also weighed on its performance as investors worried about high inventories in Chinese bonded warehouses.
Grains again joined the weakness. U.S. corn futures fell more than 2 per cent in late Asian trade and wheat shed 1.8 per cent.
