LONDON, June 25: World oil prices jumped to a record $60 per barrel this week on concerns about possible supply shortages during the fourth quarter when refineries could struggle to meet strong demand for heating fuel.
Copper reached a fresh historic high point in part owing to tight supplies, while sugar hit a four-year peak after the European Union agreed to slash guaranteed prices for the commodity’s producers.
The Commodities Research Bureau’s index of 17 commodities climbed to 311.69 points on Friday, from 310.98 points the previous week.
GOLD: Gold prices reached the highest level for more than three months as speculators ignored the stronger dollar.
On the London Bullion Market, gold hit 442.95 dollars at Friday’s morning fixing, the highest level since March 16.
“Everything has changed in the last few weeks,” Societe Generale analyst Stephen Briggs said.
Gold “used to follow slavishly dollar-euro, and it’s now broken away completely from that”.
A stronger US currency makes gold — denominated in dollars on world markets — more expensive for buyers and has thus traditionally led to a drop in prices.
On the London Bullion Market, gold prices jumped to 440.55 dollars per ounce at the late fixing on Friday from 437.50 dollars the previous week.
SILVER: Silver prices fell as supplies outweighed demand.
Silver has “gone back to under-performing gold”, Briggs said.
On the London Bullion Market, silver prices dropped to 7.285 dollars per ounce at the late fixing Friday from 7.395 dollars the previous week.
PLATINUM AND PALLADIUM: Platinum prices rose to the highest level for more than a year, helped by gold and the threat of strike action in South Africa later this year, while palladium steadied.
Platinum hit 897 dollars on Monday, the highest level since April 2004, before recoiling on profit-taking.
“Most people believe that the (platinum) market is better balanced now, after years of large deficits, because high prices have squeezed some of the demand, in particular jewellery demand,” Briggs said.
“So it is still hard to justify prices near 900 dollars.”
By Friday, platinum prices advanced to 894.50 dollars per ounce on the London Platinum and Palladium Market from 891 dollars the previous week.
Palladium prices stood at 188 dollars per ounce on Friday from 189 dollars.
BASE METALS: Base metals prices fell, led by nickel, except for copper which hit a fresh record high point of 3,435 dollars per tonne on Monday.
Copper has benefited from strong Chinese demand, slim stockpiles and disruption to production in Chile.
Other base metals have not fared as well.
“Overall it is not surprising that metals are seeing a pull-back especially with the continuing strength in the dollar,” said William Adams, an analyst at specialist website BaseMetals.com.
By Friday, three-month copper prices rose to 3,382 dollars per tonne on the London Metal Exchange from 3,369 dollars the previous week.
Three-month aluminium prices fell to 1,753 dollars per tonne Friday from 1,768 dollars.
Three-month nickel prices slumped to 14,875 dollars per tonne on Friday from 16,250 dollars.
Three-month lead prices dropped to 945.50 dollars per tonne Friday from 979 dollars.
Three-month zinc prices declined to 1,293 dollars per tonne Friday from 1,317 dollars.
Three-month tin prices fell to 7,450 dollars per tonne Friday from 7,625 dollars.
OIL: Crude futures hit 60 dollars per barrel for the first time as speculators took advantage of concerns about possible energy shortages later in the year.
New York’s main contract, light sweet crude for delivery in August, twice hit 60 dollars per barrel, breaking a record set earlier in the week of 59.70 dollars reached amidst strong demand for energy from China and the United States.
In London, the price of Brent North Sea crude oil for delivery in August reached an historic high point of 58.58 dollars.
With refineries worldwide already operating at maximum capacity to cope with summer gasoline demand, some analysts are predicting shortages of distillates, which include heating fuel, in the latter months of 2005.
Demand for refined crude products is usually strongest in the second half of the year as the northern hemisphere moves into winter and demand rises for heating oil.
The market largely ignored the week’s reassuring US crude inventories report and the end of a threatened strike by Norwegian oil workers.
Crude oil reserves fell by 1.6 million barrels in the week ending June 17 to 327.4 million barrels, the US government said.
Gasoline, or petrol, inventories rose 200,000 barrels to 215.9 million in the week. Distillates, used for heating oil and diesel, rose by 1.3 million barrels to 111.5 million.
“The report did not prove to be overtly bullish but still showed a bit of tightness, which gave the market all the incentive it needed to push higher at a time when the high prices do not appear to be slowing demand,” analysts at the Sucden brokerage firm said.
Norwegian Oil Industry Association and the white-collar trade union Lederne meanwhile reached a last-minute agreement on increased wages and supplements late Tuesday, just over an hour before the strike had planned to begin at midnight.
Norway is the world’s third largest oil exporter, after Saudi Arabia and Russia, and covers 14 percent of Europe’s natural gas needs.
By Friday, New York’s light sweet crude for August delivery surged to 59.50 dollars per barrel from 54.45 dollars the previous week.
In London, Brent North Sea crude for August delivery gained to 58.03 dollars per barrel from 57.01 dollars.
RUBBER: Rubber stretched to the highest level since November 2003 as the rainy season in Asia held back production.
“There is an element of almost panic in the market,” one London broker said.
“The supply side has been weak due to rains, and there is some reasonable demand.”
In Osaka, the RSS 3 August contract jumped to 164.80 US cents on Friday, from 156.90 cents a week earlier.
Singapore’s RSS 3 July contract rose to 148 US cents on Friday, from 144 cents.
COCOA: Cocoa futures pushed higher, reaching a two-and-a-half year high point in London as tensions resurfaced in leading producer Ivory Coast.
Prices reached 914 pounds per tonne on Friday, the highest point since the start of April.
“Suspension of disarmament plans for Monday, June 27 and the scheduling of another peace conference in Pretoria underscore mounting tensions and political unease in Ivory Coast,” Refco analyst Ann Prendergast said.
Disarmament of the rebels has been a key sticking point in efforts to reconcile the divided nation, the world’s top cocoa producer.
The government and rebel forces in the north signed an agreement May 14 to start the process in an attempt to reunite the country following the failed 2002 coup against President Laurent Gbagbo.
On LIFFE, London’s futures exchange, the price of cocoa for September delivery rose to 911 pounds per tonne on Friday from 890 pounds a week earlier.
On the CSCE, the New York futures market, the September contract gained to 1,586 dollars per tonne on Friday, from 1,546 dollars.
COFFEE: Coffee prices firmed in London, supported by concerns about a possible production deficit amidst poor weather in major producer Brazil.
Analysts see a deficit of between 7.0 and 10 million bags of 60-kilogramme coffee this year.
“Some also are concerned that rains in top grower Brazil could spoil the quality of the roughly one-third of the coffee harvest so far,” analysts at the Sucden brokerage firm said.
On LIFFE, Robusta quality for September delivery rose to 1,235 dollars per tonne on Friday from 1,200 dollars a week earlier.
On New York’s CSCE market, Arabica for September delivery dipped to 110.50 cents per pound on Friday, from 111.10 cents.
SUGAR: Sugar prices climbed to a four-year high point on strong demand and European Union proposals for reducing production across the trading bloc.
Sugar reached 279.50 dollars per tonne in London trading on Friday, the highest level since June 2001.
The European Union’s executive commission unveiled a plan Wednesday to reform Europe’s heavily subsidised sugar market by sharply cutting EU guaranteed prices.
“The reform will reduce EU sugar production but will benefit sugar cane producers such as Brazil and Australia as the reduced European production will eventually boost world prices,” Sucden analysts said.
The reforms come two months after the WTO ruled EU sugar policies to be illegal in response to a complaint from Australia, Brazil and Thailand.
“Brazil — the worlds biggest sugar producer with 40 percent of the free world market — is expected to fill much of the vacuum left by the EU in international trade with increased production,” Refco’s Prendergast said.
By Friday on LIFFE, the price of a tonne of white sugar for August delivery jumped to 278 dollars from 260.50 dollars a week earlier.
On the CSCE in New York, a pound of unrefined sugar for July delivery stood at 9.20 cents on Friday from 8.89 cents.
GRAINS AND SOYA: Soya prices reached a near one-year high point on buying by investment funds, which boosted also most grains.
Soyabeans leapt to 757.5 cents per bushel on Wednesday, the highest level since mid-July 2004.
On LIFFE, wheat for July delivery slipped to 63.75 pounds per tonne on Friday from 66.50 pounds a week earlier.
In Chicago, the price of wheat for July delivery rose to 336.50 cents per bushel Friday from 326 cents.
Maize for July delivery climbed to 230.25 cents per bushel on Friday from 227.25 cents.
Soyabeans for July delivery jumped to 740 cents per bushel on Friday from 713 cents.
July-dated soyabean meal — used in animal feed — gained to 231.20 dollars per tonne on Friday from 225.50 dollars.
COTTON: Cotton prices rose, supported by technical and speculative buying.
New York’s July contract rose to 49.35 cents per pound on Friday from 47.45 cents the previous week.
The Cotton Outlook Index of physical cotton stood at 54.55 cents on Thursday from 52.60 cents a week earlier.
WOOL: Wool prices firmed during a quiet trading week.
“The Australian wool market finished the week with prices 0.3 percent higher,” the Australian Wool Industries Secretariat said.
The Australian Eastern index climbed to 7.07 Australian dollars per kilo on Thursday, from 7.05 Australian dollars a week earlier.
The British Wooltops index was unchanged at 396 pence on Thursday. —AFP
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