LONDON, April 5: Volatility gripped commodity markets this week as traders reacted to the dollar’s performance and stretched global supplies of raw materials, analysts said.
Maize was the star performer, hitting a record high of six dollars a bushel.
OIL: World oil prices surged close to $107 a barrel this week as investors took their cue from tightening world energy supplies and strengthening global demand, before ending subdued.
Prices found solid support as news of dwindling gasoline (petrol) inventories in key consumer the United States jangled supply fears.
The market is closely studying gasoline reserves ahead of the US peak demand season for motor fuel, which begins in May when Americans kick-start their summer vacations.
Prices soared Wednesday as official data showed that US gasoline reserves tumbled by 4.5 million barrels last week, compared with forecasts for a drop of 2.5 million barrels.
Traders shrugged off news that US crude inventories were up 7.4 million barrels in the week ending March 28, well above analyst consensus forecasts for a gain of 2.25 million barrels.
However, prices dipped Thursday after US Federal Reserve chairman Ben Bernanke said that the US economy may be in recession, and the International Monetary Fund said it would cut its global growth forecast by a substantial half a percentage point.
Despite expectations for declining oil demand growth amid a US-led global slowdown, supply and demand factors are still tight ... (and) any supply shocks are still likely to have a large effect on crude prices, said Sucden analyst Nimit Khamar.
Crude futures were also supported by the weak US currency, which tends to encourage demand for dollar-priced crude because it becomes cheaper for foreign buyers.
The US unit sank further against the euro on Friday after news that US employers cut a surprisingly large 80,000 jobs in March, the biggest decline in employment in five years, according to a government report.
By Friday, New York’s main oil futures contract, light sweet crude for delivery in May, eased to $105.75 per barrel from $105.85 a week earlier.
Brent North Sea crude for May rose to $104.30 per barrel from 103.94.
PRECIOUS METALS: Gold, silver, platinum and palladium prices all fell on profit-taking after recently reaching record and multi-year high points.
Gold fell under $900 an ounce to reach the lowest point for more than two months.
On the London Bullion Market, gold dropped to $905.50 per ounce at Friday’s late fixing from $934.25 a week earlier.
Silver dropped to $17.45 per ounce from $18.36.
On the London Platinum and Palladium Market, platinum dipped to $1,988 per ounce at the late fixing on Friday from $1,990 a week earlier.
Palladium declined to $438 per ounce from $444.
BASE METALS: Base metals mostly fell but losses were limited thanks to tight global supplies and the weak US currency.
Prices are consolidating and could ease back further in the short term, said Barclays Capital analyst Gayle Berry.
Recent builds in base metals inventories have led some in the market to question just how tight the underlying fundamentals of base metals really are.
We have argued for a long while that, despite the fog of economic uncertainty and US consumption weakness, broadly speaking base metals markets are incredibly tight and, by our calculations are on their way to becoming even tighter Berry added.
By Friday, copper for delivery in three months rose to $8,500 per ton on the LME from $8,455 a week earlier. Three-month aluminium prices fell to $2,898 per ton from $2,996.
Three-month nickel dropped to $28,912 per ton from $31,495.
Three-month lead climbed to $2,915 per tonne from $2,885.
Three-month zinc prices declined to $2,302 per ton from $2,358. Three-month tin slipped to $20,025 per ton from $20,650.
GRAINS AND SOYA: Maize prices struck historic highs of six dollars a bushel after the US government forecast a drop in production.
By Friday on the Chicago Board of Trade, maize for May delivery jumped to $5.96 per bushel from $5.60 a week earlier.
May-dated soyabean meal — used in animal feed — fell to $12.60 from $12.67. Wheat for May delivery dropped to $9.40 per bushel from $9.89.
On LIFFE, London’s futures exchange, the price per tonne of wheat for November delivery rose to 152 pounds from 150 pounds a week earlier.
COCOA: Cocoa prices declined in London after recent multi-year highs caused by unrest in major producer Ivory Coast.
By Friday on LIFFE, the price of cocoa for May delivery declined to 1,291 pounds per ton from 1,320 pounds a week earlier.
On the New York Board of Trade (NYBOT), the May cocoa contract fell to $2,275 per ton from $2,408.
COFFEE: Coffee prices slid in much the same way as cocoa after also striking multi-year highs recently.
By Friday on LIFFE, Robusta for July delivery recoiled to $2,263 per ton from $2,339 the previous week.
On the NYBOT, Arabica for May delivery decreased to 131.85 US cents per pound from 132.50 cents.
SUGAR: Sugar prices steadied. By Friday on LIFFE, the price per ton of white sugar for August delivery grew to 339 pounds from 337.50 pounds the previous week.
On NYBOT, the price of unrefined sugar for May delivery dipped to 11.87 US cents per pound from 11.96 cents.
RUBBER:Rubber prices were unchanged as key buyer China remained on the sidelines.
Trading during the week was quiet. China is not buying, said an official with a rubber producing firm who requested anonymity.
With China having ample rubber stocks in their warehouses, they will continue to remain on the sidelines. Trading will remain dull. On Friday, the Malaysian Rubber Board’s benchmark SMR20 remained unchanged at 264.25 US cents per kilogramme from the previous week.
WOOL: Wool prices rose in major producer Australia as trading resumed after a two-week break.
The market opened on a good basis after the Easter break, said the Australian Wool Industries Secretariat, adding that buyers from China were dominant, followed by those from Europe.
The Eastern Index rose to 9.67 Australian dollars a kilo, from 9.61 Australian dollars two weeks previously.—AFP
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