Oil and gold prices in China corrected yesterday after surging for days on international markets. Evidence points to growing concern about political tension in the Middle East and the weakening US dollar as major factors.
The most actively traded fuel oil futures contracts traded on the Shanghai Futures Exchange (SHFE) fell 1.43 percent yesterday to close at 3,777 yuan per ton.
The price drop was widely regarded by traders as a short-term correction in a highly volatile market, and caused by rising tension in the Middle East and the weakening US dollar. Traders said these factors would continue to push up global oil prices in the long term.
Yesterday, fuel oil futures contracts for delivery in January fell 51 yuan per ton to close at 3,777 yuan per ton.
The price of fuel oil futures on the SHFE climbed a total of 3 percent from last Thursday to reach a record high of 3,770 yuan per ton on Tuesday, when it jumped 40 yuan.
Analysts said the fuel oil increase was largely driven by surging crude oil futures prices on the global market. Tensions on the Turkey-Iraq border have intensified, raising concern that supplies could be interrupted as global inventories decline.
Crude oil futures in the global market have seen big jumps in the past few days. For example, the most actively traded crude oil futures contract for delivery in November on the New York Mercantile Exchange (NYMEX) soared. It reached a high of $88.2 a barrel on Tuesday. Crude oil futures on the NYMEX yesterday dropped 0.48 percent to $87.17 a barrel.
Analysts said the domestic spot and futures markets in fuel oil closely track the international market trend. Lin Hui, is an analyst at a futures company of Orient Securities. He said fuel oil futures in China are expected to continue rising in the next few weeks, as prices keep climbing on the global market.
Some overseas traders reportedly expect crude oil prices to go up to $100 per barrel from the current level of about $83.
Gold prices have also increased continuously over the past week, largely because of the weakening US dollar. Gold futures contract prices on the NYMEX rose 1.9 percent from last Thursday to reach a record high of $772 per ounce this Tuesday. Gold futures prices dropped 0.38 percent yesterday to $762.6 per ounce.
Global market enthusiasm for gold has also boosted futures trading of the metal on the domestic market.
Questions:
1. What is causing higher oil prices?
2. Gold prices are rising due to what factor?
3. According to analysts, what do domestic spot and futures markets in fuel oil track closely?
Answers:
1. Tensions in the Middle East, and specifically tension on the Turkey-Iraq border.
2. Weakening of the US Dollar.
3. International markets.
（英语点津 Celene 编辑）
About the broadcaster:
Jonathan Stewart is a media and journalism expert from the United States with four years of experience as a writer and instructor. He accepted a foreign expert position with chinadaily.com.cn in June 2007 following the completion of his Master of Arts degree in International Relations and Comparative Politics.
