Oil and gold surge, base metals extend losses
LONDON, Nov 24: The price of crude oil surged to a record peak close to $100 a barrel in New York trading this week on the back of a falling US currency and tight energy supplies.
Precious metal futures mostly rebounded as the dollar tumbled to fresh record low points against the euro, which makes commodities priced in the US unit cheaper for buyers using stronger currencies.
On Friday, the European single currency struck $1.4967, the highest level since the euro’s creation in 1999, on expectations of slower US economic growth and more cuts to US interest rates.
OIL: New York crude hit an historic 99.29 dollars a barrel this week, while London’s Brent North Sea crude struck an all-time peak of $96.53.
Oil futures failed to breach $100 a barrel, despite US government data which showed that US energy stockpiles fell more heavily than expected last week.
The rally fizzled out amid the US Thanksgiving holiday weekend, with New York’s financial markets shut on Thursday.
The market was subdued on Friday amid indications that some member nations of the 13-strong crude exporters’ group Opec might increase output, which would have a dampening effect on the market.
However, Sucden analyst Michael Davies cautioned: Another Opec output increase is no certainty as many members have said that more crude is unlikely to calm a rally driven by speculators and geopolitical tensions.”
In Vienna on Friday, the UN atomic watchdog sat down to its second and final day of debate on Iran’s disputed atomic drive at a board meeting, which was expected to be wrapped up by the afternoon.
By Friday, New York’s main oil futures contract, light sweet crude for delivery in January, jumped to $97.31 a barrel, compared with $95.13 for the December contract a week earlier.
In London, Brent North Sea crude for January delivery leapt to $94.43 a barrel, from $91.62.
PRECIOUS METALS: Gold and silver prices rebounded as the dollar slumped in foreign exchange trading.
Continued dollar weakness, strengthening oil prices and safe haven buying triggered by broader credit market concerns should buoy (metal) prices higher in the forthcoming sessions, Barclays Capital analysts said.
Higher oil prices spark inflationary concerns, while gold is regarded as a haven in times of economic trouble.
On the London Bullion Market, gold prices increased to $815.25 an ounce at Friday’s late fixing, from $789.75 a week earlier.
Silver prices rose to 14.55 dollars an ounce, from $14.45.
On the London Platinum and Palladium Market, platinum prices gained to $1,475 an ounce at the late fixing Friday, from $1,450 a week earlier.
Palladium prices fell to $353 an ounce, from $366.
BASE METALS: Base metals prices extended losses owing to higher inventories and fears about slowing economic growth.
Prices have now fallen to levels which are starting to look attractive from a buying perspective, UBS analyst Robin Bhar said.
On Friday, the price of copper for delivery in three months dropped to $6,690 a ton on the London Metal Exchange, from $6,875 a week earlier.
Three-month aluminium prices fell to $2,485 a ton, from $2,550.
Three-month nickel prices slid to $28,600 a ton, from $31,400.
Three-month lead prices declined to $2,900 a ton, from $3,340.
Three-month zinc prices decreased to $2,240 a ton, from $2,510.
Three-month tin prices slumped to $16,600 a ton, from $17,350.
COCOA: Cocoa prices were mixed as the market tracked the performance of sterling and the dollar.
By Friday on the LIFFE, London’s futures exchange, the price of cocoa for March delivery fell to 952 pounds a ton, from 959 pounds a week earlier.
On the New York Board of Trade (NYBOT), the March cocoa contract rose to $1,951 a ton, from $1,927.
SUGAR: Sugar prices traded mixed amid forecasts of a large supply surplus for the sweetener.
The rally in prices at the start of 2005/06, which has resulted in increased cane plantings, is the main driver behind the continued imbalance between supply and demand, said analysts at the broker Czarnikow.
By Friday on the LIFFE, the price per ton of white sugar for March delivery edged up to 288.60 pounds, from 287.30 pounds.
RUBBER: Rubber prices rebounded on tight supplies and soaring oil prices.
We forecast the price of rubber to go up due to wet weather amid strong demand, said an official at a rubber-producing firm.
Also with oil prices flirting with $100 per barrel, rubber prices will edge upwards.Rainy weather in Asian producing countries is hurting supplies, while crude oil is used to make synthetic rubber.
On Friday, the Malaysian Rubber Board’s benchmark SMR20 rose to 233.10 US cents per kilogramme from 230.25 cents last week.
WOOL: The Australian wool market finished 1.3 per cent higher on average, with strong buying interest from China and Europe.
It was a good market this week, the Australian Wool Industries Secretariat said.
Demand was keen across all wool types and micron ranges and the week closed on a positive note. The Eastern Index gained to 9.92 Australian dollars a kilo, from 9.79 Australian dollars a week earlier.----AFP