Canada commodity prices fall for fifth straight month in April

10 May 2012 15:45  [Source: ICIS news]

TORONTO (ICIS)--Canadian commodity prices fell for the fifth month in a row in April, dropping 2.3% from March, with the decline led by lower export prices for natural gas and oil, a bank said on Thursday.

Toronto-based Scotiabank said that its monthly price index for Canadian commodities declined again as Canadian natural gas export prices “fell to a decade-low" in April.

In addition, prices for western Canadian crude exports to the US fell on the back of lower international oil prices, the bank said. Western Canadian crude oil typically trades at a discount to West Texas Intermediate (WTI) oil, and that discount widened further in April, the bank added.

However, Scotiabank’s commodities market specialist Patricia Mohr said that the discount would narrow significantly in May and June as seasonal refinery turnarounds in the US midwest are being completed.

In addition, Canadian crude exports will benefit from the upcoming reversal of the US Seaway pipeline, Mohr said. The reversal will link the over-supplied oil hub at Cushing, Oklahoma, to refineries at the US Gulf coast, where international oil prices prevail.

Mohr said that April’s Canadian commodity prices were down 15.3% year on year from April 2011, partly because of a moderation in China’s GDP growth and ongoing concerns over the outlook for Europe’s economies.

"However the pullback in commodity prices remains mild compared with the 46% plunge from July to December 2008 during the global recession,” she said.

“Signs point to a rebound in commodity prices in May," she said.

Paul Hodges studies key influences shaping the chemical industry in his Chemicals and the Economy Blog

By: Stefan Baumgarten
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