Economic expansion forecast reduced to 3% from 3.4%.
TORONTO — Commodity prices fell as a World Bank report said it now expects the global economy to expand 3% in 2015, down from its earlier forecast of 3.4%. It said that a strengthening US economy and the fall in oil prices won’t be enough to offset troubles in the eurozone and emerging markets.
The Canadian dollar was lower Jan. 13 as commodities fell amid a forecast for slower global economic growth. The loonie lost 0.12 of a cent to 83.53 cents US.
Copper prices were slammed as the March contract tumbled 13 cents to US$2.51 a pound, on top of a 12-cent slide over the previous three sessions as inventories of the metal viewed as an economic bellwether grow. Copper prices have also been impacted by slowing growth in China and have tumbled 25 per cent over the past year.
Elsewhere, the February crude contract in New York slipped six cents to US$45.83 a barrel, the lowest level since April 2009. At that time, demand had plummeted as most countries were in recession in the wake of the 2008 financial crisis.
Crude prices have collapsed since June, 2014, down almost 60 per cent but this time around the major reason for the drop has been a glut of supply on global markets.
The price slide accelerated from the end of November when OPEC made it clear it wouldn’t cut production to support prices and many big energy companies have responded by dramatically cutting back on spending plans.
The currency was also under pressure after Bank of Canada deputy governor Timothy Lane said the collapse in oil prices is bad for Canada.
He said although lower oil prices produce benefits such as putting more cash in consumers’ pockets, the gains will be more than outweighed by the losses because lower incomes in the oil patch and along its supply chain will hurt the rest of Canada’s economy.
Gold prices also headed lower with the February contract down $1.50 to US$1,232.90 an ounce.
© 2015 The Canadian Press