Commodity price index slips

By Felicity Anderson, Nzoom.com Business News Editor

Wednesday 22nd May 2002

A higher New Zealand dollar is pushing local prices down and global spot dairy prices have edged even lower the Commonwealth Bank of Australia's NZ commodity price index shows.

The NZ index has been relatively stable in non-NZ dollar denominations since mid February weeks, the CBA reports, but has declined over this period by 6% in NZ dollar terms.

Focusing on oil prices, the bank warns there is a potential for prices of crude to drift 10% or higher this year as demand increases. But a higher NZ dollar should help offset the affects of this.

International oil prices are currently remaining within the $US22-28 per barrel Opec target range for a basket of oils.

But global demand is growing as global growth accelerates and Opec continues to restrict supply.

The bank reports Opec production is continuing to exceed its members and allied countries' self-imposed quota, but the excess is not disrupting prices and US crude stocks have declined in recent weeks.

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