Copper, oil prices head down after magnitude 8.9 earthquake
TORONTO: The Toronto stock market headed for a lower open March 11 as oil prices fell sharply following a massive earthquake in Japan. A magnitude 8.9 earthquake slammed Japan’s northeastern coast Friday afternoon, unleashing a four-metre tsunami. The quake sparked tsunami alerts all round the Pacific Rim, from Australia all the way up to the west coast of the US.
There were no big market moves as a result of the earthquake, with the one exception was commodity prices. The April crude contract on the New York Mercantile Exchange fell $2.22 to US$100.48 a barrel.
“I think the view is the Japanese economy will take at least a temporary step back because of this and oil prices have dropped,” said Doug Porter, deputy chief economist at BMO Capital Markets.
Copper prices also continued to retreat with the May contract down seven cents to US$4.13 a pound. Copper has plunged about eight percent since mid-February, as worries about higher energy prices have raised concerns regarding demand. Even with Friday’s decline, crude oil is still up about 10 percent from the middle of last month on worries that fighting in Libya could spread to big oil producers in the Persian Gulf, such as Saudi Arabia.
Commodities were also under pressure after data showed China’s consumer prices rose sharply again in February despite government efforts to cool surging inflation that communist leaders worry might fuel unrest. Inflation remained elevated in February at 4.9 percent, exceeding analysts’ forecasts and above the government’s four percent target for the year.
Gold prices headed slightly higher with the April bullion contract in New York up $1.40 to US$1,413.90 an ounce.