LONDON, Dec 1: Oil prices plunged this week on easing supply concerns despite coming close to breaching $100 per barrel on Monday, analysts said.
Since striking record highs above $99 last week and reaching $99.11 on Monday, prices have dived by about ten dollars in New York and eight dollars in London.
Speculation is mounting that oil exporters’ cartel Opec will decide to increase its output at a meeting next Wednesday and the rising dollar also helped bring down prices.
Elsewhere, precious metals fell across the board as the US dollar rebounded slightly.
The European single currency stood at 1.4692 in late trade on Friday, which compared with last week’s record peak of $1.4967. A stronger US unit tends to dampen demand for dollar-priced commodities because it makes them more expensive for buyers using weaker currencies.
OIL: At the start of the week, the market staged a fresh assault on $100 as traders fretted over tight crude supplies globally.
New York crude rocketed as high as $99.11 per barrel, which was a whisker away from the record $99.29 struck the previous week.
Prices then tumbled owing to feverish speculation that Opec may decide to ramp up output, amid news of a smaller-than-expected drawdown of US energy reserves.
They won back some ground Thursday after a fire at a key pipeline linking Canada with the United States, which is the biggest energy consumer in the world.
By Friday, however, crude futures fell back as the market was reassured that the explosion at a key pipeline between the United States and Canada would not have a major impact on supply, traders said.
Enbridge Inc had said late Wednesday that an explosion in the northern US state of Minnesota forced the company to shut down four pipelines.
Enbridge’s oil pipeline system serves major refineries in Canada’s Ontario province as well as the Great Lakes region of the United States, delivering about 2.2 million barrels per day.
Elsewhere, the Opec meets in Abu Dhabi next Wednesday -- with many traders looking for higher output to stem recent record-breaking prices.
All eyes will be on Opec now, ahead of the group’s meeting on December 5th, said Nimit Khamar, analyst at the Sucden brokerage in London.
Many expect the group to hike supplies in order to cool off prices.The oil producers’ group is a key player in the energy market because it produces about 40 per cent of the world’s crude supplies.
By Friday, New York’s main oil futures contract, light sweet crude for delivery in January, dived to $88.85 a barrel, compared with $97.31 a week earlier.
In London, Brent North Sea crude for January delivery tumbled to $88.68 a barrel, from $94.43.
PRECIOUS METALS: The prices of precious metals sank as oil prices fell from recent heights and the US dollar clawed back some ground in the foreign exchange market.
On the London Bullion Market, gold prices fell to $783.50 an ounce at Friday’s late fixing, from $815.25 a week earlier.
Silver prices slid to $14.23 an ounce, from $14.55.
On the London Platinum and Palladium Market, platinum prices dived to $1,440 an ounce at the late fixing Friday, from $1,475 a week earlier.
Palladium prices fell to $349 an ounce, from $353.
BASE METALS: Base metals prices mainly rose owing to strong quarterly economic growth data from key consumer the United States.
The US economy surged at a 4.9-per cent pace in the third quarter ahead of the impact of credit and housing ills, official data showed. That compared with the previous figure of 3.9pc.
The strength of the upward revision ... was impressive and it does raise the question whether the markets have become too gloomy too soon, said BaseMetals.com analyst William Adams, in reference to recent price losses.
On Friday, the price of copper for delivery in three months climbed to $7,045 a ton on the London Metal Exchange, from $6,690 a week earlier.
Three-month aluminium prices rose to $2,514 a ton, from $2,485.
Three-month nickel prices declined to $27,100 a ton, from $28,600.
Three-month lead prices rose to $3,022 a ton, from $2,900.
Three-month zinc prices increased to $2,556 a ton, from $2,240.
Three-month tin prices soared to $17,100 a ton, from $16,600.
COCOA: Cocoa prices crept higher in quiet trading conditions.
By Friday on the LIFFE, London’s futures exchange, the price of cocoa for March delivery rose to 980 pounds a ton, from 952 pounds on Friday of the previous week.
COFFEE: Coffee prices were stable.
Trade and industry buying at the lower levels once again provided support, said Sucden analyst Ralph Hawes.
By Friday on the LIFFE, Robusta quality for January delivery eased to $1,824 a ton, compared with $1,829 on Friday of the previous week.
SUGAR: Sugar prices held steady.
By Friday on the LIFFE, the price per ton of white sugar for March delivery edged down to £287.20, from 288.60 pounds on Friday of the previous week.
On the NYBOT, the price of unrefined sugar for March delivery stood at 9.78 US cents a pound, unchanged from Wednesday of the previous week.
GRAINS AND SOYA: Prices were mixed after crude oil prices suffered heavy losses.
Energy prices are sharply lower. That is bearish for corn, soyabean oil and soyabeans, said AG Edwards analyst Bill Nelson.
High oil prices, however, encourage demand for maize and soya because they are used in the production of biofuels -- which are cheaper than crude.
By Friday on the Chicago Board of Trade, the price of maize for December delivery fell to $3.80 a bushel, from $3.89 on Friday of the previous week.
RUBBER: Rubber prices continued upwards due to supply concerns and uncertainty over high oil prices.
The prevailing rainy season in Malaysia is raising supply concerns, said an official at a rubber-producing firm.
On Friday, the Malaysian Rubber Board’s benchmark SMR20 rose to 237.30 US cents per kilogramme from 233.10 cents last week.
WOOL: The Australian wool market finished 0.6 per cent lower on average, despite strong demand from Europe and Asian nations China and India.
There was a good spread of competition with buyers for Italy dominant in Newcastle and buyers for Europe. China and India also active across the country, the Australian Wool Industries Secretariat said.—AFP
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