Drop In Crude Oil Price Pulls Down Crude Palm Oil

Palm Oil HQ Posted by Palm Oil HQ 35 days ago
Source: http://biz.thestar.com.my
Added 35 days ago - PETALING JAYA: Crude oil prices fell to their lowest in more than a month yesterday even as the US Congress planned to curb excessive speculation, but analysts believe demand for the commodity will continue to be strong.

The fall in the crude oil price also dragged down the crude palm oil (CPO) price, which tumbled to a seven-month low of RM3,027 a tonne.

The decline in the CPO price was also due to higher soyoil output as well as a slowdown in purchase by China, leading to record high inventory.

In a report yesterday, Bloomberg said the US Congress was studying plans to outlaw elements of oil futures trading which lawmakers found “distorted” demand and contributed to the surge in prices in the past year.

It also quoted Petroleos Mexicanos chief executive officer Jesus Reyes Heroles as saying that excluding the effect of speculation, oil would be around US$80 a barrel.

This is about 37% below the price of US$126.59 a barrel as at 5pm yesterday. On July 11, crude oil briefly jumped past the record US$147 level.

TA Securities head of research Kaladher Govindan said that robust demand from Asian countries would continue to keep prices steady.

He expected oil prices to hit US$160 per barrel in the third quarter on continued weakening of the US dollar, supply shocks and strong demand.

“Prices may retreat after that on global recessionary fears, strengthening of the US dollar post potential increase in the Federal Reserve’s target rate, and possible intervention of the US government in the futures market,” he said.


But even if the US economy entered into a recession, he does not expect oil prices to dip below US$70 per barrel as demand from Asian countries were very strong.

TA’s forecast average crude oil prices for this year and 2009 are US$115 and US$100 per barrel respectively.

RAM Rating Services Bhd industrial products and services ratings manager Thong Mun Wai said the price of crude oil was expected to remain on the uptrend as global supply struggled to keep pace with demand.

This, according to Thong, is largely attributed to delays in the commissioning of new production capacity caused by shortages of rigs, marine support vessels and technical personnel as well as the lack of access to reserves controlled by national oil companies.

“Global demand for oil is expected to grow, albeit at a slower pace, supported by consumption in emerging economies like China, India and the Middle East,” he said.

Nevertheless, Thong said prices were expected to remain volatile due to speculative activity in the futures markets as well as concerns over geo-political events which could disrupt supply.

He forecast oil prices to be around US$110 to US$130 per barrel by the end of the year with an upside bias should the supply situation worsen.

As for CPO prices, OSK analyst Alvin Tai noted that there was some recovery in the July exports to China but probably not enough to halt the rise in the inventory level.

“In the near term, the CPO price will trend lower until the inventory level stops rising. That’ll happen when China’s purchase returns to the usual 320,000 to 350,000 tonnes per month,” he said.

China bought only 235,000 tonnes from Malaysia in June.

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Latest Crude Palm Oil (CPO) Futures Prices (Hourly)

The Chart and table below show the latest Crude Palm Oil (CPO) Futures prices, as traded on the Bursa Malaysia Derivitives Exchange.


First trading session: Weekdays 10:30 a.m. to 12:30 p.m
Second trading session: Weekdays 3:00 p.m. to 6:00 p.m
Current Malaysian local time: 12:14:03 PM Thu, August 28th 2008

Palm Oil HQ Crude Palm Oil Futures Prices
1 USD = 3.3818 MYR Updated: 12:00:03 PM Thu, August 28th 2008
Month Open High Low Last Sett.p Change Volume O.P
Sep 20082,4372,4412,4372,4412,480-39131,466
Oct 20082,4622,4802,4622,4802,501-219512,503
Nov 20082,4622,4882,4522,4882,502-1467115,251
Dec 20082,4662,4902,4632,4902,504-14868,848
Feb 2009----2,518--572
Mar 2009-2,4652,520-2,189--0
0.00---2,50002,668-0
Jul 2009----2,511--2,374
Sep 2009---2,5510984-0
Nov 2009----2,507--424
Jan 2010----2,505--886
Mar 2010----2,503--219
May 2010----2,503--1,114
Jul 2010----2,503--36

Historical Crude Palm Oil (CPO) Futures Prices

Average Historical Spot Settlement Price for Crude Palm Oil on the Bursa Malaysia Derivitives Exchange.

Palm Oil HQ Historical Crude Palm Oil Futures Prices