LONDON, Sept 15: The price of New York crude oil leapt above $80 per barrel for the first ever time this week as investors ploughed into the market on concerns over stretched global energy supplies.
Many raw materials were boosted by the weak US currency, which makes dollar-denominated commodities cheaper for foreign buyers using stronger currencies.
The European single currency forged an all-time record high of $1.3927 on Thursday on economic woes and the prospect of lower interest rates in the United States, dealers said.
OIL: The price of New York oil surged above $80 a barrel this week on lingering concerns over tight supplies in the United States, the world’s biggest consumer of energy.
New York’s light sweet crude struck an historic peak of $80.20 per barrel on Thursday.
Oil prices began their record-breaking surge on Wednesday after news that US crude reserves dived lower last week, compounding concerns over tight global energy supplies despite Opec’s move to hike output earlier in the week.
The US Department of Energy revealed Wednesday that US crude inventories fell by a sharper-than-expected 7.1 million barrels in the week to Friday, September 7. The drop was almost three times heavier than market expectations.
A decision on Tuesday by the Organization of the Petroleum Exporting Countries to pump an extra 500,000 barrels of oil per day from November gave little relief to the tight market, analysts said.
New York crude touched an all-time record high Thursday following the closure of several US refineries in the path of Hurricane Humberto, traders said.
The shut down of the refineries is likely to be very temporary and inevitably there will be profit-taking after the record highs, said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.
But he said prices would remain under pressure in the near-term because September is the peak hurricane month in the United States, the world’s biggest energy consumer.
Winter in the northern hemisphere is also nearing which means demand for heating fuel would peak.
The record-breaking week for the oil market came despite an announcement by the International Energy Agency that it was lowering its predictions of global crude demand for this year and 2008 because of ongoing turbulence across financial markets.
The IEA, which acts as energy policy adviser to industrialized countries, reduced its demand forecast to 85.9 million barrels per day in 2007 and 88 million bpd in 2008, from its prediction last month of 86 and 88.2 million bpd respectively.
By Friday, New York’s main oil futures contract, light sweet crude for delivery in October, soared to $79.59 a barrel, from $76.19 a week earlier.
In London, Brent North Sea crude for November delivery jumped to $76.70 a barrel on Friday, compared with $74.47 for the October contract a week earlier. The October contract expired Thursday.
PRECIOUS METALS: Precious metals mostly rose.
Gold prices hit $717.15 per ounce, which was last seen in May 2006, as the metal was boosted by a raft of supportive factors including buoyant Asian demand for jewellery, analysts said.
Gold was also energised by record high US crude prices, which increase the risk of inflation. The higher cost of goods raises the attractiveness of the precious metal as a defence against the erosion of the value of money.
On the London Bullion Market, gold soared to $716.35 an ounce at Friday’s late fixing, from $701 a week earlier.
Silver jumped to $12.79 an ounce at Friday’s late fixing, from $12.57 a week earlier.
On the London Platinum and Palladium Market, platinum rose to $1,294 an ounce at the late fixing Friday, from $1,289 a week earlier.
Palladium eased to $330 an ounce, from $334.
BASE METALS: Base metal prices mainly rose, pushed higher by star performers copper and lead.
Given that we’re still in a seasonally slow period in terms of demand, the subprime problems continue to be the short-term driver of sentiment, said Barclays Capital analyst Sudakshina Unnikrishnan.
On Friday, the price of copper for delivery in three months leapt to $7,550 a ton on the London Metal Exchange, from $7,204 a week earlier.
Three-month aluminium prices sank to $2,440 a ton, from $2,451.
Three-month nickel prices rose to $28,598 a ton, from $27,649.
Three-month lead prices rocketed to $3,209.85 a ton, from $2,920.
Three-month zinc prices increased to $2,849 a ton, from $2,800.
Three-month tin prices gained to $14,875 a ton, from $14,799.
COCOA: Cocoa prices edged up amid concerns that crop disease could hamper output in leading producer Ivory Coast.
By Friday on the LIFFE, London’s futures exchange, the price of cocoa for December delivery rose to 967 pounds a ton, from 963 pounds a week earlier.
On the New York Board of Trade (NYBOT), the December contract rose to $1,840 a ton, from $1,835 the previous Friday.
COFFEE: Coffee prices rose on buoyant global demand.
By Friday on the LIFFE, Robusta quality for November delivery surged to $1,940 a ton, from $1,828 one week
earlier.
On the NYBOT, Arabica for December delivery soared to 119.90 US cents a pound, from 116.65 cents.
SUGAR: Sugar prices fell as traders anticipated a large world surplus in the current crop year ending September 2008.
By Friday on the LIFFE, the price per ton of white sugar for December delivery fell to 269.10 pounds, from 275.40 pounds a week earlier.
On the NYBOT, the price of unrefined sugar for October delivery dipped to 9.29 US cents a pound, from 9.43 cents a week earlier.
GRAINS AND SOYA: Wheat drifted lower on profit-taking following its recent record-breaking run, while soya rose on forecasts of falling harvests.
In recent weeks, wheat has struck fresh highs on fears that crops from drought-hit key exporters Australia and Argentina.
By Friday on the Chicago Board of Trade, the price of maize for December delivery rose to $3.49 a bushel, from $3.47 a week earlier.
Wheat for December delivery eased to $8.39 a bushel, from $8.43 the previous week.
November-dated soyabean meal -- used in animal feed -- advanced to $9.47, from $9.05.
On the LIFFE, the price per ton of wheat for May delivery rose to 179.00 pounds, from 176.50 pounds a week earlier.
RUBBER: The price of rubber rose for the sixth week in a row due to falling stocks and flagging production in key producing nations.
Prices are expected to remain at high levels. Stocks are low and production has declined due to rain, said an official at a rubber producing firm.
On Friday, the Malaysian Rubber Board’s benchmark SMR20 increased to 211.85 US cents per kilo, from 209.70 the previous week.---AFP
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