LONDON, April 12: Commodity prices mainly rose this week, led by crude oil, which struck a record high above $112 a barrel on the back of falling American energy stockpiles and the weak US currency, analysts said.
Other star performers included tin and maize, which also enjoyed lifetime peaks owing to tightening supplies.
Most dollar-denominated commodities gained ground because the weakening US currency makes them cheaper for foreign buyers and therefore tends to stimulate demand.
The European single currency had soared Thursday to a historic $1.5913 owing to favourable interest rate differentials and amid a darkening economic outlook in the United States, analysts said.
OIL: The price of New York oil rocketed to a record high $112.21 per barrel on Wednesday after the US government announced heavy falls to its energy stockpiles.
London’s Brent North Sea crude for May firmed struck a historic $109.98 on Thursday.
Crude futures then fell Friday on forecasts of slower crude demand growth offset a tight supply situation for energy.
In its monthly report on trends in the energy market, the International Energy Agency revised down “significantly” its estimate for global demand for oil this year to 87.2 million barrels per day, a reduction of 310,000 barrels per day from the estimate in the March report.
The IEA’s forecast was owing to a “dramatic” slowing of the US economy.
Crude futures had been boosted on Wednesday after the US Department of Energy reported that American energy stockpiles fell across the board during the week ending April 4.
US crude reserves slumped by 3.2 million barrels and gasoline or petrol inventories shed 3.4 million barrels, the DoE said. Both falls were higher than market expectations.
Traders are focused on supplies of gasoline — refined from crude oil — ahead of the peak demand US driving season, starting in May, when many Americans hit the roads for their holidays.
Ali Al-Naimi, oil minister from the Opec cartel’s largest producer Saudi Arabia, said there were not enough buyers of oil to justify an increase in oil production, despite high prices.
By Friday, New York’s main oil futures contract, light sweet crude for delivery in May, jumped to $109.72 per barrel from $105.75 a week earlier.
Brent North Sea crude for May climbed to $108.20 per barrel from $104.30.
PRECIOUS METALS: Gold and silver prices advanced, supported by the falling US dollar and inflationary concerns stemming from high oil prices.
Gold prices continue to take their short-term direction from currency movements and oil prices said Barclays Capital analysts.
Although prices are likely to consolidate in the near term, external factors still remain favourable for gold and should continue to underpin positive investor sentiment.Meanwhile, China became the world’s biggest producer of gold last year, overtaking South Africa which held top spot for 100 years, the independent precious metals consultancy GFMS said on Wednesday.
The price of gold was on course to reach a record high of $1,100 an ounce in 2008 amid global financial turbulence, the respected research group added in its latest annual Gold Survey.
Gold had struck an all-time peak of $1,032.70 an ounce on March 17, four days after the yellow metal breached $1,000 for the first time.
Global mine production fell by a slight 0.4 per cent in 2007 to an eleven year low, GFMS said in its report published Wednesday.
Africa saw the heaviest regional drop at 29 tons -- chiefly due to South Africa -- while output in North America and Latin America also fell ... In contrast, Asia saw gains, centred on Indonesia and China, with the latter becoming the world’s leading gold producer in 2007, it added.
Investors were forecast to drive gold to new record levels in 2008 also on the basis of an ongoing credit market crisis, lower US interest rates, rising inflation and heightened political tensions, amidst continued inflows into commodities, GFMS added.On the London Bullion Market, gold advanced to $927.75 per ounce at Friday’s late fixing from $905.50 a week earlier.
Silver climbed to $17.95 per ounce from $17.45.
PLATINUM AND PALLADIUM: Platinum prices gained ground, winning solid support from keen demand and ongoing supply issues in key producer South Africa. Sister metal palladium followed higher.
Platinum has the strongest fundamentals given the robust demand for the metal, historically low inventories and most importantly the ongoing power supply issues that have impacted South African production, Barclays Capital analysts noted.
The platinum market is set to post a hefty deficit this year and without stocks providing a buffer, any potential supply disruptions could expose prices to further upside potential.
On the London Platinum and Palladium Market, platinum rose to$ 2,019 per ounce at the late fixing on Friday from $1,988.
—AFP
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