Sky-high commodities prices were due to "froth" in the market, according to the chief executive of Glencore, the commodities trading giant that is planning a London stock market listing, but the recent sharp sell-off was an overdue correction that has not affected demand for Glencore shares.
Ivan Glasenberg said the flotation was going "exactly according to plan" and that investor demand remained very strong. "We haven't seen much pullback with the recent drop in commodity prices," he said yesterday.
Shares in publicly quoted natural resources companies have tumbled as the commodities rout has gathered pace, and prices continued to fall yesterday as other industry executives questioned whether recent record prices had been realistic.
Rex Tillerson, the chief executive of ExxonMobil, the oil giant, said that based on the fundamentals of supply and demand, oil prices should be "somewhere in the $60 to $70 range". Mr Tillerson was speaking at a hearing on Capitol Hill into high petrol prices, and responding to a question about the influence of speculators on the oil price.
Meanwhile, the International Energy Agency cut its forecast for oil demand this year, after recording zero growth in demand in March. "High oil prices have finally begun to dent demand," the Paris-based agency said. "Four dollar a gallon [US petrol] is likely to yield an anaemic US driving season. This is the main change to our demand forecast – a weaker 2011 profile in North America."
In New York, oil fell $1 to $97 a barrel, a two-and-a-half month low that takes prices back to their levels before the uprisings in the Middle East.
Analysts have speculated whether the abrupt end to the bull run in commodities prices might derail the Glencore flotation, or at least push investors to demand a lower price. The company hopes to sell about $11bn of shares. Glencore will set a price for the stock just before trading begins on 19 May. At the mid-price of the range set by its bankers, the company will be valued at $61bn.