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Oil at 2-Year Peak, But $ Curbs Gain

Crude oil prices rose to a 2-year peak in the second week of November 2010, on support from a stronger-than-expected USA jobs report, but was offset in a rebound by the dollar. Oil futures touched intraday high of US$ 87.43, the highest price since US$ 89.82 was struck intraday on 9th October, 2008, ahead of the nonfarm payrolls report, when the dollar was weaker as the appeal of commodities continued to be boosted by this week's Federal Reserve moves to boost the economy. The dollar rallied on the surprisingly strong jobs report, having been under pressure after the Fed Reserve on 3 November committed to buying US$ 600 billion in government bonds to bolster a faltering recovery. Oil prices have recovered much of the ground lost between a July 2008 record high of US$ 147.27 a barrel and the December 2008 low of US$ 32.40 hit during the recession. USA stock indices also ended slightly higher, but up a fifth straight week and posting strong weekly gains. Light, sweet crude for December settled at US$ 86.85 a barrel, the highest close since October 2008. Prices rose $ 5.42, or 6.6%, for the week, the biggest percentage gain since the week to 19 February. In London, ICE December Brent crude rose US$ 5.64 or 6.8% to settle at US$ 88.11 a barrel.

Polyester Chain: PSF prices breaks historical high

Ethylene prices continued to fall in Asian markets due to ample supplies and producers cutting run rates as they faced negative margins. However, in USA ethylene bid/offers for November were on an uptrend on support of cracker outages in Texas. Prices of paraxylene inched up once again in across markets as producers pegged up their offers higher amidst tight supplies. Major producers’ like Exxon, NPCC and Indemitsu nominated their front month Asian contract numbers at US$ 1,220 a ton about US$ 195 higher than October nomination. Prices in Europe too were influenced by Asian numbers. Downstream MEG markets rallied after a brief downturn last week, buoyed by good downstream sentiment and strong crude prices while the PTA spot firmed up on successive limit-ups trigger of PTA futures in China and bullish macro-economic trend set sentiments to spur. The cost pressure on polyester chips producers soared to a new high while they hiked offers, downstream polyester yarn producers disagreed with the high prices. Polyester filament yarn markets were lifted in Asia by rising PTA and MEG prices and modest downstream demand. PFYs were dearer in China and Pakistan while other markets of India and Malaysia/Indonesia saw prices rolling over previous week’s numbers. PSF broke through historical highs backed by the rising cotton and upstream feedstock markets.

Nylon Chain: Benzene sobers

Market sentiments and outlook in Asian benzene turned pessimistic and prices dropped slightly in the middle of the week but only to rise a bit by the week-end as buyers returned to the market. In USA, benzene spot prices were within a wider range, with offers higher than previous week’s close. In Europe, November bids and offers were buoyed by firmer crude values. Caprolactum prices remained stable but at high level this week although crude futures moved higher and benzene in Asia making corrections. Supplies are expected to increase this month with the gradual restart of plant after completing turnarounds. Nylon chip producers were under great cost pressure although caprolactum and benzene values did not change this week. In China, conventional and semi-dull high speed spinning chips prices rose while other markets of Taiwan and Europe reported stability. Nylon filament yarn prices were on the uptrend on support of firm nylon chips prices and limited inventory wit

published November , 2010
 
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