LONDON, Jan 17: Commodity prices mainly slid this week, with oil dropping below $35 per barrel in New York amid continuing global economic gloom, analysts said.

Prices (of oil) fell sharply... as once again a gloomy global economic outlook raised demand concerns, said Barclays Capital analyst Kevin Norrish.

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

OIL: New York oil prices tumbled in a market hammered by dismal economic news, worries over increasing US energy stockpiles and a new Opec forecast of falling demand for 2009.

The market took another hit after the International Energy Agency slashed its crude demand forecasts on Friday due to a much sharper-than-expected worldwide economic slowdown.

Crude oil prices... slide further amid continuing economic gloom, said analyst Nimit Khamar at the Sucden brokerage in London.

The IEA said Friday that the market faced its first two-year contraction in demand since 1982 and 1983.

The energy watchdog added that it wanted to anticipate sharp downward revisions to global economic growth forecasts and so had halved its own estimate to just 1.2 per cent given the worsening outlook Accordingly, it cut its projection for 2009 oil demand by one million barrels per day (bpd) to 85.3 million bpd, representing a fall of 0.6 per cent from revised 2008 figures.

For 2008, the IEA put global oil demand at 85.8 million bpd, down 0.3 per cent, adding that the expected two-year contraction in oil demand would be the first since 1982 and 1983 In a regular monthly report, the IEA noted that Opec output in December was down one million bpd from September and down nearly two million bpd from mid-2008 highs when oil hit record highs above 147 dollars per barrel.

Opec, which has cut output 4.2 million bpd over recent months in a bid to support prices, had warned on Thursday that global oil demand would contract by a more-than-expected 0.2 per cent this year in light of the economic crisis.

The depressed world economy is expected to have a large impact on oil demand this year, especially in industrialised countries, the Organization of the Petroleum Exporting Countries had said.

The year 2009 started with a very depressed world economy which caused the year’s oil demand forecast to show negative growth” of 0.18 million barrels per day (bpd) or 0.2 per cent, Opec said in a monthly report.

World oil prices fell by about 54 per cent in 2008 as a sharp global economic slowdown dampened energy demand in the second half of the year. Last July, crude futures rocketed to record highs of above $147 a barrel.

By Friday on the New York Mercantile Exchange (NYMEX), light sweet crude for delivery in February slid to $35.29 from $40.35 a week earlier.

On London’s InterContinental Exchange (ICE), Brent North Sea crude for March stood at $47.50, from 43.71 the previous week when February was the most traded contract.

PRECIOUS METALS: Gold sank close to $800 an ounce this week, hit by the strengthening dollar. Silver, platinum and palladium also pulled lower.

Gold, the traditional safehaven in troubled times, could hit record highs again in coming months as investors seek to protect their money in the face of the worst economic downturn in years, the independent precious metals consultancy GFMS said Thursday.

GFMS said gold prices could achieve a fresh all time high in the first half of 2009 as net investment surges ... there has already been several months of rocketing demand, chiefly in Europe and North America. The main driver behind the expected increase in investment is risk aversion and a desire to preserve wealth, it said in a report.

Gold was also seen as benefiting from concerns over the solidity of other assets, be that cash at a time of bank failures, equities as we head into a possibly deep recession or bonds as the threat of inflation looms. The metal had hit a record high $1,032.70 an ounce in March last year but then fell back sharply.

On the London Bullion Market on Friday, gold dropped $833.75 an ounce at the late fixing from $847.25 a week earlier.

Silver slid to $10.78 an ounce from $11.22 .

On the London Platinum and Palladium Market, platinum dipped to $943 an ounce at the late fixing on Friday from $988 .

Palladium retreated to $185 an ounce from $196 .

BASE METALS: Base metals prices diverged amid widespread concern that a global recession would hurt demand.

Gains are unlikely to persist amid the current recessionary environment characterised by poor sentiment, weak demand and rising inventories, warned Barclays Capital analysts.

By Friday, copper for delivery in three months rose to $3,397 a ton on the London Metal Exchange from $3,329 the previous week.

Three-month aluminium eased to $1,487 a ton from $1,555.

Three-month lead climbed to $1,174 a ton from $1,155 .

Three-month zinc increased to $,265 a ton from $1,245 .

Three-month tin fell to $11,199 a ton from $11,286.

Three-month nickel dropped to $10,913 a ton from $11,449 .

COCOA: The price of cocoa fell on profit-taking after striking a historic pinnacle the previous week.

Cocoa futures had hit a record high of $1,861 a ton last week 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 sank to 1,762 pounds a ton from 1,831 pounds a week earlier.

On the New York Board of Trade (NYBOT), the March cocoa contract decreased to $2,463 a ton from $2,609.

COFFEE: Coffee prices weakened on profit-taking after scoring two-month peaks the previous week.

By Friday on LIFFE, Robusta for delivery in March fell to $1,965 a ton from $2,207 a week earlier.

On the NYBOT, Arabica for March sank to 116.35 US cents a pound from 117.25 US cents.

GRAINS AND SOYA: Grains and soya prices receded as the market was dampened by a downbeat US market report.

Monday we had a negative supply demand report and production report on corn and beans... That continues to be an anchor in the market, said US Commodities analyst Don Roose.

By Friday on the Chicago Board of Trade, maize for delivery in March fell to $3.77 a bushel from $4.10 the previous week. March-dated soyabean meal -- used in animal feed -- dipped to $10.12 from $10.36 .

Wheat for March decreased to $5.84 a bushel from $6.29.

SUGAR: Sugar prices shot higher.

Sugar prices rise sharply as diminishing expectations for the size of Indian production this year underpins gains, Barclays Capital analysts said.

By Friday on LIFFE, the price of a ton of white sugar for delivery in March rose to 344.50 pounds from 337.50 pounds a week earlier.

On NYBOT, the price of unrefined sugar for March advanced to 12.34 US cents per pound from 12.12 cents.

RUBBER: Malaysian rubber prices edged up amid weak demand particularly from the auto industry due to the global economic downturn, dealers said.

The International Rubber Study Group is predicting a drop in global rubber consumption by as much as five per cent this year.

However, they said demand for the commodity from China remained strong ahead of the Chinese New Year holidays which fall at the end of this month.

On Friday, the Malaysian Rubber Board’s benchmark SMR20 rose to 145.60 US cents a kilo from 144.95 US cents a kilo a week ago.—AFP