Oil Falls, Rubber Prices Fall More Than 2%

Rubber prices plunged more than two percent in trading this morning, Wednesday (6/12/2017), in line with the weakening of crude oil prices.

The price of rubber for delivery in May 2018, the most active contract on the Tokyo Commodity Exchange (Tocom), tumbled 2.10% or 4.40 points to 205 yen per kilogram (kg) at 10:14 pm.

Earlier, the May contract price opened down 0.19% at 209 level after trading on Tuesday (05/12/2017) was able to end up in the green zone despite a rise of only 0.05% or 0.10 points to the level of 209.40 yen per kg.

According to Gu Jiong, an analyst at commodity trading company Yutaka Shoji, rubber prices are affected by crude oil prices, prompting investors to sell rubber.

"In addition, investors are looking at the strengthening Japanese yen currency," he said, as quoted by Bloomberg.

The price of West Texas Intermediate (WTI) oil for January delivery was down 0.42% or 0.24 points to US $ 57.30 per barrel at 10:10 pm.

Brent oil futures for February delivery fell 0.38 percent, or 0.24 points, to as low as 62.62 per barrel on the London-based ICE Futures Europe exchange.

Oil prices slipped into the red zone in morning trade following an industry report showing a surge in US gasoline inventories. The increase also overshadowed expectations of shrinking US crude inventories.

The American Petroleum Institute (API) reported gasoline stockpiles in the US jumped 9.2 million barrels last week. This figure will be the biggest increase since January 2016 if government data released Wednesday shows the same increase.

Meanwhile, the yen appreciated 0.29% or 0.33 points to 112.27 per US dollar at 10:20 pm, after on Tuesday (5/12) ended down 0.17% at 112.60.