Commodity prices rise on EU deal
LONDON, June 30: Commodity prices mostly rose over the week thanks to strong support won on Friday after an EU summit delivered an unexpected deal aimed at further tackling the eurozone debt crisis. A surprise agreement to save the euro wrenched after an all-night summit of leaders of the 17 eurozone nations brought immediate relief to crisis-hit Italy and Spain and sent the single currency soaring on Friday.
OIL: World oil prices surged at the end of a volatile trading week, with crude futures supported by the surprise EU summit deal and strike action by energy sector workers in Norway, traders said.
Prices rocketed more than $4 a barrel on Friday as traders lauded a $150-billion growth pact pushed through by the European Union after Italy and Spain lifted their opposition to it, analysts said.
“The optimistic news from the EU summit spread bullish signs across the oil market as crude oil prices rebounded strongly from recent losses,” said Sucden Financial Research analyst Myrto Sokou.
Crude markets were rejoicing after Spain and Italy withdrew their opposition to the deal which enabled it to be passed, said Justin Harper, market strategist for IG Markets Singapore.
Prices were up “primarily because of the summit and this positive news that came out,” he told AFP.
“Because the expectations were so low to start with, people really weren’t expecting anything to come out of it and we’ve got some positive development, obviously a lot of money, $150 billion (120 billion euros),” he added.
Despite the crude price rally, Harper said things were still looking grim in the eurozone.
“I think it’s a short term rally, it could fizzle out because people have seen that there’s still a lot of infighting between all the different member states,” he said.
By late Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in August rocketed to $95.43 a barrel from $90.62 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for August rallied to $82.20 a barrel from $79.39.
PRECIOUS METALS: Prices won strong support Friday in the wake of the EU summit deal.
“Gold and the other precious metals are making a strong recovery…doubtless on the back of a much weaker US dollar in the
wake of the EU summit,” Commerzbank analysts said in a note to clients.
By late Friday on the London Bullion Market, gold climbed to $1,598.50 an ounce from $1,565.50 a week earlier.
Silver grew to $27.08 an ounce from $26.81.
On the London Platinum and Palladium Market, platinum decreased to $1,428 an ounce from $1,435.
Palladium dropped to $578 an ounce from $608 an ounce.
BASE METALS: Base metals prices rose across the board after a sharp rally Friday. Aluminium had hit a two-year low at
$1,832.25 on Wednesday.
“The metals are undergoing a relief rally for now,” said William Adams, an analyst at Fast Markets research group.
By late Friday on the London Metal Exchange, copper for delivery in three months jumped to $7,684 a ton from $7,339 a week
Three-month aluminium grew to $1,905 a ton from $1,878.
Three-month lead rose to $1,842 a ton from $1,820.
Three-month tin gained to $18,910 a ton from $18,410.
Three-month nickel advanced to $16,690 a ton from $16,350.
Three-month zinc increased to $1,860 a ton from $1,813.
COFFEE: Coffee prices firmed on easing concerns about ample Brazilian supplies.
“The sharp fall in the price of Arabica coffee which we have observed since autumn 2011 and which we believe to be excessive
may have come to an end,” said Commerzbank analyst Carsten Fritsch.
“The September contract is now trading at over 165 US cents per pound again, having hit 151 US cents per pound nearly two
weeks ago, its lowest level since June 2010.
“For many months, the prospect of a record crop in a Brazilian high-yield year has been weighing on prices. These expectations
now have to be revised,” he added.
By Friday on NYBOT-ICE, Arabica for delivery in September jumped to 165.65 US cents a pound from 157.95 cents a week
On LIFFE, Robusta for delivery in September advanced to $2,138 a ton from $2,071.
COCOA: Cocoa futures rebounded on expectations of tight supplies in top producer Ivory Coast.By Friday on LIFFE, London’s
futures exchange, cocoa for delivery in September grew to ¤£1,546 a ton from ¤£1,486 a week earlier.
In New York on the NYBOT-ICE, cocoa for September gained to $2,232 a ton compared with $2,137.
SUGAR: Sugar prices gained as rainy weather hit supplies.
“Excess rainfall in Brazil has been supporting prices,” said Barclays Capital analyst Sudakshina Unnikrishnan.
By Friday on LIFFE, the price of a ton of white sugar for delivery in August edged up to $604.40 from $604 a week earlier.
On NYBOT-ICE, the price of unrefined sugar for July climbed to 20.72 US cents a pound from 20.56 cents.
RUBBER: Prices dropped as dwindling demand from lead consumer China and tumbling oil prices offset a tight supply situation
caused by the rainy season.
Crude oil is used to make synthetic rubber.
By Friday, the Malaysian Rubber Board’s benchmark SMR20 slid to 276.45 US cents a kilo from 279.05 cents a week