LONDON, Jan 10: Commodity prices traded mixed this week, as oil dropped, metals diverged and cocoa hit a record peak in London, at the start of what is expected to be another tough year for global financial markets.

Commodities rode a rollercoaster in 2008, with crude oil, gold and base metals striking record heights on tight supplies, before tumbling as the global financial crisis sparked demand worries.

OIL: Oil prices dropped close to $40 this week on concerns over a US stockpile buildup and worries that the global economic slump would further dampen demand, traders said.

The US Department of Energy said on Wednesday that stockpiles of crude increased by 6.7 million barrels last week, far higher than predictions from analysts for a gain totalling only 700,000 barrels.

News of the buildup in recession-struck United States, the world’s biggest crude consuming nation, pushed New York crude down by $5.95 and London Brent oil by $4.67 on Wednesday.

The only thing that can drive oil higher in the short term is geopolitical news because we are loaded with crude, said Phil Flynn of Alaron Trading.

The 6.7 million barrels in crude show supplies of crude are reaching glut-like proportions, he said.

Market participants also remain concerned over higher US jobless numbers and President-elect Barack Obama’s mammoth task of stimulating growth.

The US economy shed 524,000 jobs in December, sending the unemployment rate to 7.2 per cent, according to official data published Friday.

The recession-ravaged economy lost 2.6 million jobs over the course of 2008, the most since 1945, the Labour Department said. Of those, 1.9 million were lost in the past four months.

Oil prices rallied at the start of the week, bouncing back above $50 in London as the energy market was shaken by disruptions to gas supplies across Europe, already troubled by a cold snap.

Russia has cut supplies bound for Europe via Ukraine in retaliation for Ukraine’s alleged theft of Russian gas.

Ukraine denies siphoning off Russian gas and has accused Moscow of engineering the crisis.

Oil prices had already risen sharply on Monday as the Israeli-Palestinian conflict intensified.

World oil prices fell by about 54 per cent in 2008 as a sharp global economic slowdown weighed on energy demand in the second half of the year.

However, in the first half, crude futures rocketed to record highs of above $147 a barrel in July on fears of supply disruptions.

Towards the end of 2008, prices slumped to just above $33 the lowest in four and a half years.

By Friday on the New York Mercantile Exchange (NYMEX), light sweet crude for delivery in February slid to $40.35 from $46.05 a week earlier.

On London’s InterContinental Exchange (ICE), Brent North Sea crude for February dropped to $43.71, from 46.89.

PRECIOUS METALS: Gold prices headed south as the dollar strengthened but sister metal silver rose.

Sentiment was again mixed in the precious metals... with dollar strength putting gold under pressure, said James Moore at thebulliondesk.com

On the London Bullion Market on Friday, gold dropped $847.25 an ounce at the late fixing from $874.50 a week earlier.

Silver climbed to $11.22 an ounce from $11.08.

On the London Platinum and Palladium Market, platinum climbed to $988 an ounce at the late fixing on Friday from $926 on December 19.

Palladium climbed to $196 an ounce from $185 .

BASE METALS: Base metals prices were mixed after a positive start to the new year the previous week.

The market is returning its focus to demand side woes amid a deteriorating macro-economic environment, said analysts at Barclays Capital, adding that inventories continued to climb.

By Friday, copper for delivery in three months jumped to $3,329 a ton on the London Metal Exchange from $3,169 the previous week.

Three-month aluminium gained to $1,555 a ton from $1,535.

Three-month lead rose to $1,155 a ton from $1,080.

Three-month zinc dipped to $1,245 a ton from $1,251 .

Three-month tin fell to $11,286 a ton from $11,500 .

Three-month nickel dropped to $11,449 a ton from $12,875 .

COCOA: Cocoa futures struck a record high of $1,861 a ton on Thursday in London, lifted by lingering concerns about the quality of harvest in the Ivory Coast, which also suffers from widespread violent unrest.

By Friday on LIFFE, London’s futures exchange, the price of cocoa for delivery in March climbed to 1,831 pounds a ton from 1,788 pounds a week earlier.

On the New York Board of Trade (NYBOT), the March cocoa contract increased to $2,609 a ton from $2,542 .

COFFEE: Coffee prices rebounded.

News of farmers in Vietnam resuming coffee sales, after holding back over the holiday season, failed to deter prices from rising, said Sucden analyst Ryan Bennett.

By Friday on LIFFE, Robusta for delivery in March jumped to $2,207 a ton from $1,788 a week earlier.

On the NYBOT, Arabica for March gained to 117.25 US cents a pound from 110.70 US cents.

GRAINS AND SOYA: Grains and soya prices rose ahead of key monthly production data out of the United States.

If there’s not a major negative surprise (regarding the data) on Monday, development in the weather in South America should continue to be dominant,said Doan Advisory Services analyst Bill Nelson.

By Friday on the Chicago Board of Trade, maize for delivery in March climbed to $4.15 a bushel from $4.12 the previous week.

March-dated soyabean meal -- used in animal feed -- advanced to $10.29 from$ 9.77 .

Wheat for March increased to $6.23 a bushel from $6.11 .

SUGAR: Sugar prices extended gains.

By Friday on LIFFE, the price of a ton of white sugar for delivery in March rose to 337.50 pounds from 327 pounds a week earlier.

On NYBOT, the price of unrefined sugar for March advanced to 12.12 US cents per pound from 11.88 cents.

RUBBER: Malaysian rubber prices rose as major buyer China dived into the market.

New enquiries from China and the dry season in key producer Thailand is pushing prices up, said a dealer who requested anonymity.

By Friday, the Malaysian Rubber Board’s benchmark SMR20 climbed to 144.95 US cents a kilo from 130.70 US cents per kilo a week ago.—AFP