LONDON: Oil prices came under pressure this week from concerns about Greece’s future in the eurozone and the possibility of higher Iranian crude supplies.

Gold failed to benefit from its status as a haven investment.

US markets were shut Friday ahead of the July 4 Independence Day celebrations.

OIL: Prices slumped with focus on high US output as traders looked ahead to Greece’s weekend referendum that could determine whether it remains in the eurozone.

Traders are worried about a global supply glut and the first rise in the US oil-rig count this year.

The US government meanwhile revealed a surprise weekly build of 2.4 million barrels for the country’s commercial crude inventories.

“This was the first build in stockpiles since the end of April, ending a run of eight weekly declines,” said Fawad Razaqzada, technical analyst at Forex.com.

Saxo Bank analyst Ole Hansen added Friday that the US situation combined with “Opec producing the most since 2012... leaves the upside potential for crude oil (prices) still very limited”.

There are concerns also over a return to the market of Iranian crude.

Talks between six world powers and Iran aimed at curbing the country’s nuclear ambitions were this week handed a deadline extension to July 7.

Iran rejects allegations that it has been seeking to develop nuclear arms, and has resisted moves to give the International Atomic Energy Agency unbridled access to sensitive military sites to verify its claims.

Successful outcome of the talks could see the lifting of sanctions that have forced the country to cut by half its oil exports.

The Greece situation has meanwhile weighed on the euro this week, making dollar-denominated crude more expensive for holders of the single currency.

By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in August slid to $60.39 a barrel from $63.25 a week earlier.

On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for August retreated to $55.41 a barrel from $59.59 a barrel.

No gold rush

PRECIOUS METALS: Gold struggled to attract demand from investors.

“In spite of the continual uncertainty over the situation in Greece, there remains no signs of increased appetite for gold,” said Jameel Ahmad, chief market analyst at trading group FXTM.

“You would normally expect demand for safe-haven assets to improve significantly when events such as the Greece crisis occur, but this has not happened. There is clearly hesitation from buyers to even consider purchasing gold as we approach the timing of a US interest rate rise and the outlook for gold remains weak.”

By Friday on the London Bullion Market, the price of gold eased to $1,167.95 an ounce from $1,170.50 a week earlier.

Silver dropped to $15.64 an ounce from $15.83.

On the London Platinum and Palladium Market, platinum gained to $1,083 an ounce from $1,074.

Palladium grew to $701 an ounce from $676.

BASE METALS: Nickel hit a six-year low point at $10,795 a tonne in a dramatic drop, before pulling back considerably.

“The weak Chinese equity markets are clearly preventing metal prices from making any noticeable recovery,” said analysts at Commerzbank.

Capital Economics added: “Weak demand from the stainless steel sector has been one factor in the price weakness” of nickel. “Growth in China’s stainless steel output ground to a halt last year and producers drew down nickel inventories,” they added in a note to clients.

Shanghai stocks plunged almost six per cent Friday, capping their worst three weeks in 23 years as analysts warned panic was setting in and authorities pledged more support after recent moves to staunch the blood-letting failed.

By Friday on the London Metal Exchange, copper for delivery in three months rose to $5,803.50 a tonne from $5,758.50 a week earlier.

Three-month aluminium gained to $1,728 a tonne from $1,709.50. Three-month lead fell to $1,775 a tonne from $1,787. Three-month tin decreased to $14,400 a tonne from $14,865. Three-month nickel slid to $12,125 a tonne from $12,560. Three-month zinc dipped to $2,025 a tonne from $2,026.

Cocoa hits high

COCOA: London-traded cocoa hit a four-year high at £2,191 a tonne as supplies tighten in Ghana.

By Friday on LIFFE, London’s futures exchange, cocoa for delivery in September reached £2,171 a tonne from £2,161 a week earlier.

By Thursday on the ICE Futures US exchange, cocoa for September edged up to $3,288 a tonne from $3,274 the previous Friday.

SUGAR: Prices extended recent gains.

By Friday on LIFFE, a tonne of white sugar for delivery in August grew to $372.60 from $362.80 a week earlier.

By Thursday on ICE Futures US, unrefined sugar for October rose to 12.30 US cents from 12.09 cents the previous Friday.

COFFEE: Prices fell as the dollar strengthened.

By Thursday on ICE Futures US, Arabica for delivery in September slid to 127.40 US cents a pound from 136.75 cents the previous Friday.

By Friday on LIFFE, Robusta for September decreased to $1,744 a tonne from $1,818.

RUBBER: Prices declined as the ringgit strengthened and on fears over the Greek debt crisis, traders said.

On Friday, the Malaysian Rubber Board’s benchmark SMR20 fell to 149.90 US cents per kilo from 155.00 US cents a week ago.

Published in Dawn, July 5th, 2015

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