LONDON, Dec 30: Crude futures tumbled in a mixed week for commodities, at the end of a year in which many raw materials saw their prices strike record highs.
Despite light, sweet crude reaching an all-time peak of $78.40 per barrel in New York during July, its price actually ended 2006 down compared with a year earlier.
Commodities generally saw their prices excel for a fifth straight year during 2006, with most striking all-time highs on the back of strong investor demand, which many analysts do not expect to continue in 2007.
The Commodities Research Bureau's index of 17 commodities fell to 306.45 points on Friday at about 1530 GMT, from 308.89 points a week earlier.
Trading was shortened this week owing to the festive holidays.
GOLD: Gold prices rebounded this week from a seven-week low.
Technical buying (...), a softer dollar tone and hawkish Iran/IAEA comments helped gold edge higher, said James Moore, an analyst for specialist website TheBullionDesk.com.
Iran warned on December 24, that the UN nuclear watchdog, the IAEA, should not expect it to continue cooperation “at the same level” after the Security Council's sanctions resolution over Iran's atomic programme.
Gold tends to benefit from geopolitical tensions owing to the metal's safe-haven status.
Gold prices climbed 23 per cent in 2006.
On the London Bullion Market, gold prices jumped to $632 per ounce at Friday's morning fixing, from $619.75 one week earlier.
SILVER: Silver prices advanced close to $13 per ounce.
After its consolidation phase silver appears to have formed a base around the $12.40 level, and may be looking to rebuild its up-trend once the new year is underway, Moore said.
Silver prices had struck a near eight-month high of $14.18 per ounce on December 5. The metal rose by 45 per cent in 2006.
On the London Bullion Market, silver prices rose to $12.90 per ounce at Friday's morning fixing, from $12.50 the previous week.
PALLADIUM AND PLATINUM: Palladium and platinum edged lower.
Both metals seem comfortable in their present ranges with platinum building a base above $1,100 while palladium treads water in the $305-30 area, Moore said.
Palladium prices jumped 28 per cent in 2006, while platinum gained 16 per cent over the year.
On the London Platinum and Palladium Market, platinum dipped to $1,117 per ounce at the morning fixing Friday, from $1,121 the previous week. Palladium slipped to $324 per ounce at the morning fixing on Friday, from $326 one week earlier.
BASE METALS: Base metals prices mainly rose, led by tin which struck the highest level for 17 years.
The price of tin broke multi-year high points owing to expectations of a supply deficit in 2007 caused mainly by a drop in Indonesian output.
On the London Metal Exchange (LME) the price per ton for delivery of tin in three months reached $11,800, the highest level since 1989 when the metal was re-introduced on the London market.
The price of tin has risen by about 79 per cent in 2006.
Expectations of a deficit have meanwhile been fuelled by a recent move by Indonesian authorities to shut about 20 illegal tin smelters.
Indonesia is the world's second-biggest tin producer, behind China.
The market's been very nervous about whether the smelters that were closed down and the fringe miners and fringe smelters would be able to resume operations in 2007, said William Adams, an analyst at BaseMetals.com.
Meanwhile copper prices fell this week amid news that demand for the metal in China, the world's largest consumer of copper, is likely to fall seven per cent this year to 3.4 million tons, the first decline so far this decade.
The National Development and Reform Commission, the country's top economic regulator, said copper imports will slump 40 per cent to less than 800,000 tons this year as a result of weakening demand.
Base metals have meanwhile soared to record and multi-year highs in 2006 on a combination of strong demand by investment funds amid robust economic growth in China, as well as output disruptions.
Nickel led commodity price rises in 2006, rocketing 150 per cent. Zinc meanwhile soared 122 per cent over the year.
On Friday, three-month copper prices fell to $6,381 per ton on the London Metal Exchange from 6,431 dollars the previous week.
Three-month aluminium prices dropped to $2,633 per ton from $2,764.
Three-month nickel prices climbed to $33,705 per ton from $32,200. Three-month lead prices rose to $1,675 per ton from 1,620 dollars.
Three-month zinc prices advanced to $4,2360 per ton from $4,225.
Three-month tin prices jumped to $11,650 per ton from $11,000 a week earlier.
OIL: World oil prices tumbled briefly below $60 per barrel in New York on Friday as the market focused on the US mild winter, rather than unrest in oil-producing nation Iran or news of a huge drop in stockpiles of US crude.
The markets seem to have assumed a year-end liquidation mode with a singular focus on weather, Fimat analyst John Kilduff said.
This meant that traders overlooked official US data published Thursday which showed that crude oil stockpiles slid 8.1 million barrels to 321 million in the week ended December 22. The drawdown was much steeper than the 2.5-million-barrel decline expected by Wall Street analysts.
The DoE report also showed that levels of distillate products, which include heating oil, increased 500,000 barrels to 133.6 million over the week, in line with most forecasts.
The mild winter in the United States has led to a drop in demand for heating fuel.
Oil prices had meanwhile rocketed to record high points above 78 dollars per barrel during the northern hemisphere summer owing to unrest in the oil-rich Middle East and supply disruptions.
However they have since tumbled, with light, sweet crude down about 1.5 per cent since the start of 2006 and Brent crude up only 2.0 per cent over the year.
This week the market preferred to overlook tension in Iran, the world's fourth biggest producer of crude.
United Nations Security Council had voted at the weekend to impose sanctions against major oil producer Iran over development of its nuclear energy programme.
Before the UN decision, some analysts had argued that Iran could cut its oil exports in response to sanctions. However many market watchers believe Iran would be unlikely to cut off its major source of revenue, namely oil exports.
By Friday in New York, a barrel of crude for delivery in February slumped to $60.15 per barrel from 62.81 dollars the previous week.
In London, a barrel of Brent North Sea crude for delivery in February dropped to $60.27 per barrel, from $62.81.
RUBBER: Rubber prices jumped for a second week running to reach the highest points since August.
The market “continued to go up this week which is unusual” because one expected traders to bank profits, said Rashid Ahmed of Corrie MacColl.
On TOCOM, Tokyo's commodity exchange, natural rubber for May delivery advanced to 249.10 yen per kilogram on Friday, from 233.30 yen a week earlier.
Singapore's RSS 3 April contract climbed to 205.50 US cents per kilogram on Friday, from 194.75 US cents a week earlier.
COCOA: Cocoa prices advanced a little.
When trading resumed on Wednesday volumes were still light as many market players remained absent until the new year, Sucden analyst Michael Davies said.
Cocoa futures had struck the highest levels for five months in New York at one point during the previous week, owing to expectations of a supply deficit during the current season which ends in 2007.
On the LIFFE, London's futures exchange, the price of cocoa for March delivery increased to 888 pounds per ton on Friday, from 883 pounds a week earlier.
On the New York Board of Trade (NYBOT), the March contract gained to $1,641 per ton on Friday, from $1,625 the previous week.
COFFEE: Coffee prices rose close to recent highs.
London Robusta coffee futures gained ground on fund and trade buying on strength in New York, Davies said.
New York Arabica coffee futures were stronger on speculative and fund buying, but with little fundamental news to justify the move higher, he added.
Robusta breached $1,600 per ton on Wednesday, close to a seven-and-a-half year high struck recently.
Arabica meanwhile reached 130 cents per pound, close to eight-month highs seen earlier in December.
Robusta's price jumped 36 per cent in 2006, while Arabica gained 17 per cent over the year.
On LIFFE, Robusta quality for March delivery climbed to $1,590 per ton on Friday, from $1,583 a week earlier.
On NYBOT, Arabica for March delivery increased to 125.65 cents per pound on Friday, from 125.30 cents the previous week.
SUGAR: Sugar prices fell slightly during a quiet week's trading.
The tone of the market went from stable to disappointing, Fimat analyst James Cassidy said.
Davies of Sucden said the market remains under pressure from expectations of a global supply surplus in 2006/07.
By Friday on LIFFE, the price of a ton of white sugar for March delivery dropped to 342.80 dollars at about 1545 GMT, compared with $346.60 a week earlier.
On NYBOT, the price of unrefined sugar for March delivery eased to 11.86 US cents per pound, from 11.91 US cents the previous week.
GRAINS AND SOYA: Grains and soya prices mostly advanced.
AG Edwards analyst Victor Lespinasse said prices were being supported by expectations that there will be a big wave of fund buying at the beginning of 2007.
It usually happens in the beginning of the year and no one wants to be short, he said.
In Chicago trade, maize prices surged 81 per cent in 2006, while wheat jumped 49pc and soya rose 11 per cent over the year.
On the Chicago Board of Trade, the price of wheat for March delivery stood at US$5.03 per bushel on Friday, from 5.04 dollars the previous week.
Maize for March delivery climbed to $3.90 per bushel on Friday, from $3.78 the previous week.
January-dated soyabean meal -- used in animal feed -- jumped to 6.76 dollars on Friday, from 6.53 dollars the previous week.
On the LIFFE, the price of a ton of wheat for January delivery increased to 97.25 pounds on Friday, from 95 pounds.
COTTON: Cotton prices gained further as the market awaited more Chinese buying.
On the NYBOT, the March contract rose to 56.80 US cents per pound at about 1610 GMT on Friday, from 55.85 US cents the previous week.
The Cotton Outlook Index of physical cotton stood at 59.75 US cents on Thursday, from 59.40 cents a week earlier.
WOOL: The Australian wool markets, shut over the festive holiday period, reopens on January 8.
The Eastern index had stood at 8.39 Australian dollars per kilo on December 14.
Wheat prices jumped 33 per cent during 2006.—AFP
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