28 June 2011 19:02 [Source: ICIS news]
Patricia Mohr, senior vice president of economics at Toronto-based Scotiabank, said May’s “modest” decline in the bank’s monthly commodity price index had been expected.
Declines in oil, gas and metals were only partially offset by a slight increase in agricultural commodity prices, she said.
“Potash prices continue to strengthen, with high grain and oil seed prices incenting strong fertilizer application in
Mohr said physical supplies of corn (maize) are low globally and corn prices could move up “quite high, depending upon how the
As for the near-term oil price outlook, Mohr said prices fell in the wake of the International Energy Agency’s (IEA) decision to release 60m bbl of strategic oil stocks, over 30 days - a move that would dampen prices and provide stimulus to the slowing US economy.
Longer-term, Canada needs to do more to open up fast-growing Asian markets to oil from western Canada as it is too risky to rely only on the US as an export market, Mohr said.
“If we did have more export capability into
Mohr said West Texas Intermediate (WTI), a lighter crude than Brent, is currently trading at a $15/bbl discount to Brent, partly because of the build-up of Canadian shipments to the Cushing oil hub in
That discount could fall once Cushing is linked up to planned pipelines to US Gulf coast refining centres, she added.
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