LONDON, Aug 13: Oil prices hit a record $67.10 in New York and shed through an historic 66 dollars in London this week on US refinery outages, while the world’s appetite for energy showed no signs of abating.
The Commodities Research Bureau’s index of 17 commodities rose to 323.97 points on Friday, from 315.24 points the previous week.
GOLD: Gold prices made strong gains before pulling back slightly.
Gold made an early pop to the $450 level on the European opening (on Friday), touching 449.60 dollars before running into profit taking, said James Moore, an analyst for the specialist website TheBullionDesk.com.
A test towards Decembers 17-year high of $456 looks quite likely in the coming week.
Meanwhile the euro strengthened against the dollar in the wake of weaker-than-expected US retail sales growth and sky-rocketing oil prices.
A weaker dollar makes gold, which is priced in the US currency on world markets, more attractive to buyers using other currencies. Gold is also seen as a good hedge against fluctuations in the value of the dollar.
On the London Bullion Market, gold prices soared to $447.25 per ounce at the late fixing on Friday from 438.25 dollars the previous week.
SILVER: Silver prices fell as speculators sold up.
Over the past few days silver has succumbed to fresh speculative selling, said UBS analyst John Reade.
But with investor interest around it seems likely that the fresh short positions could be vulnerable to getting squeezed out, which could see silver back up to $7.20-7.25 in the near term.
On the London Bullion Market, silver prices fell to $7.175 per ounce at the late fixing Friday from $7.205 the previous week.
PLATINUM AND PALLADIUM: Platinum prices reached the highest level for more than one year whilst palladium lost ground.
Platinum rose to $924 per ounce at Friday’s fixing on the London Platinum and Palladium Market — a level not reached since April 2004.
The move higher is driven by speculative buying on the New York and Tokyo futures market, UBS analyst John Reade said.
Meanwhile sister metal palladium suffered from the surplus state of the market.
By Friday, platinum prices advanced to $915 per ounce on the London Platinum and Palladium Market from $908 the previous week.
Palladium prices stood at $187 per ounce on Friday from $191.50.
BASE METALS: Base metals prices mostly made strong gains, with aluminium bolstered by production fears in China.
Fund buying lifted all the metals, observed William Adams, analyst with specalist website BaseMetals.com.
The funds seem to be keen on aluminium as higher energy prices — combined with China’s move to stop tax-efficient smelting — have the potential to impact negatively aluminium supply.
By Friday, three-month copper prices eased to $3,590 per ton on the London Metal Exchange from $3,594 the previous week.
Three-month aluminium prices shot up to $1,922.50 per ton Friday from $1,897.
Three-month nickel prices stood at $15,050 per ton on Friday from $14,225.
Three-month lead prices gained to 888 dollars per tonne Friday from $863.50.
Three-month zinc prices extended to $1,317.50 per ton Friday from $1,296.
Three-month tin prices climbed to $7,240 per ton Friday from 7,160 dollars.
OIL: In the face of ferocious global demand for energy, world oil prices vaulted the 66-dollar barrier this week, as US refinery shutdowns and rising Middle East tensions pushed the market to record levels.
New York futures hit 467.10 at one point on Friday, while London’s Brent crude contract touched a historic high point of 66.55 dollars.
Friday marked a fifth straight day of strong gains due in part to heavy speculative buying.
A fall in US gasoline stocks also combined with refinery outages to fuel worries that supply might struggle to meet demand for gasoline during the ongoing summer driving season in the United States.
The International Energy Agency (IEA) meanwhile singled out low spare production capacity in the Organizzation of Petroleum Exporting Countries (Opec) as a major factor behind soaring prices.
New York futures have now rocketed by 164 per cent since August 2002, when they stood at just $25 per barrel. They have jumped some 61 per cent since August 2004.
However, adjusted for inflation, they remain below levels reached in the wake of the 1979 Iranian revolution when prices surged to upwards of $80 a barrel in today’s money.
BP’s Texas City refinery, the third largest in the US, now has four units out of commission, the first of which has been out of use since March 23, while problems were experienced at a ConocoPhillips facility in Wood River, Illinois.
The IEA held steady its forecast for growth of overall demand at 1.60 million barrels per day this year and 1.78 million barrels next year, allowing for an easing of apparent demand for oil in China and a small upward adjustment for US demand.
The Department of Energy said meanwhile in Wednesday’s weekly report that gasoline, or petrol, inventories fell by 2.1 million barrels in the week to August 5.
Amid record oil prices, Opec said Tuesday it had boosted production in a bid to cool the market.
In addition, traders have been monitoring developments in the oil-rich Middle East. Opec kingpin Saudi Arabia is on alert for possible terrorist attacks and Iran risks a showdown with the US government by resuming nuclear fuel work.
By Friday, New York’s light sweet crude for September delivery was trading at $66.75 per barrel from $62.15 the previous week.
In London, Brent North Sea crude for September delivery surged to $65.14 per barrel from $60.84.
RUBBER: Rubber prices dived as buying interest dried up.
It looks like the speculative element has now withdrawn out of the market as prices fell away from last month’s record highs, noted Rachid Ahmed, a trader at Corrie Maccoll.
Tokyo’s September contract had reached 200 yen on July 22, the highest level since June 1988.
On TOCOM, Tokyo’s commodity exchange, natural rubber for September delivery sank to 170.20 yen on Friday, from 188.90 yen a week earlier.
Singapore’s RSS 3 September contract plunged to 152.00 US cents on Friday, from 168.50 cents.
COCOA: Cocoa futures hit their lowest level for nearly one year amid speculative buying.
Prices bombed on Thursday as heavy speculative buying hammered the contract to one-year lows, said Ann Prendergast, analyst with the Refco brokerage.
Ample supply and good crop prospects for the forthcoming season set the tone.
On LIFFE, London’s futures exchange, the price of cocoa for September delivery plummeted to 784 pounds per tonne on Friday from 860 pounds a week earlier.
On the CSCE, the New York futures market, the September contract decreased to $1,341 per ton on Friday, from $1,458.
COFFEE: Coffee prices dipped while the market anticipated a fall in harvests in major producer Brazil.
Sentiment is positive and the market looks poised to advance while traders awaited a revision from the Brazilian government of its crop size, Prendergast said.
On LIFFE, Robusta quality for September delivery edged down to $1,077 per ton on Friday from $1,115 a week earlier.
On New York’s CSCE market, Arabica for September delivery eased to 106.40 US cents per pound on Friday, from 106.60 cents.
SUGAR: Sugar prices retreated in New York, but speculative buying prevented them from moving much lower.
Twice the market skirted new lows (on Friday) and recovered on fund buying, Prendergast said.
By Friday on LIFFE, the price of a tonne of white sugar for October delivery fell to $285 from $292.50 a week earlier.
On the CSCE in New York, a pound of unrefined sugar for October delivery stood at 9.90 US cents on Friday from 10.19 cents.
GRAINS AND SOYA: Grains and soya prices mainly fell, suffering from forecasts of rainfall in major producer the United States.
On LIFFE, wheat for September delivery eased to 66.50 pounds per tonne on Friday from 66.60 pounds a week earlier.
In Chicago, the price of wheat for September delivery gained to 325 US cents per bushel Friday from 320.50 cents. Maize for September delivery nudged down to 221.50 cents per bushel on Friday from 221.75 cents.
Soyabeans for August delivery declined to 651.50 cents per bushel on Friday from 657 cents.
August-dated soyabean meal — used in animal feed — was unchanged at $209.50 per ton on Friday.
COTTON: Cotton prices declined as traders forecast a rising US harvest.
The market continues to lose ground due to the expectation of a larger US crop, Prendergast said.
Many traders were “still waiting on the sidelines for the US Department of Agriculture report” on August supply and demand data, Prendergast said.
New York’s December contract fell to 49.90 US cents per pound on Friday from 51.95 cents the previous week.
The Cotton Outlook Index of physical cotton stood at 55.10 cents on Thursday from 56.05 cents a week earlier.
WOOL: Wool prices fell in quiet trade after the Australian market re-opened at the start of the month, following a summer holiday period.
It was a disappointing week for the market which continued a downward trend, the Australian Wool Industries Secretariat said. The country is the world’s biggest producer of wool.
The Australian Eastern index fell to 7.06 Australian dollars per kilo on Thursday, from $7.17.
The British Wooltops index stood at 417 pence on Thursday, unchanged from the previous week.—AFP
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