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Monday, November 01, 2004

Oil Prices Ease


Crude oil futures tumbled to a four- week low in New York on speculation that growth in demand will ease as supplies increase. U.S. manufacturing growth was the slowest in more than a year in October, according to the Institute for Supply Management. Iraqi exports rose almost 7 percent to an average 1.84 million barrels a day last month, the highest since the U.S.- led invasion last year, according to data compiled by local shipping agents.
This is good news for the economy. Good news for Iraq as well. Another interesting Bloomberg article, that may be related:
Copper prices in New York fell for the second session in three on signs of slowing demand from manufacturers in China, the world's biggest buyer of the metal. China's manufacturing activity fell to the slowest pace in six months in October, said CLSA Asia-Pacific Markets in Hong Kong. Companies had reduced access to funding as the government boosted interest rates, and higher oil and steel costs slowed spending. Copper rose to a 15-year high last month.
My impression is that China's recent boom is overheated and built on quite a bit of bad debt. A Chinese recession is quite possible, and would have signifgant international effects.


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