Record-breaking oil prices race higher
LONDON, May 17: Oil prices scaled fresh record heights this week, climbing past $127 per barrel as the market was energised by tight supplies and a weak US currency, traders said.
OIL: The price of oil soared to a record high of $127.82 per barrel on Friday, as US President George W. Bush prepared to urge Saudi Arabia to pump more crude.
Friday’s record run for New York’s light sweet crude beat the previous all-time peak of 126.98, which was set
Tuesday on worries about tight supplies despite an official downgrade to global oil demand growth.
London’s Brent crude contract for June spiked to its own historic peak of $126.34 on Friday, beating the record of 125.90 reached on May 9.
Oil prices have risen by more than a quarter since the start of 2008, when they surged past $100 a barrel for the first time.
US President George W. Bush arrived in Saudi Arabia from Israel on Friday for talks with the world’s biggest crude exporter on record oil prices that have hit Western consumers hard.
The global oil market remains indeed structurally tight, said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.
Even though demand growth is showing some weakness, supply growth is also not there. Opec continues to restrain supply and production in non-Opec states are not expected to be strong.
Saudi Arabia is the main player in the 13-nation Organization of Petroleum Exporting Countries, which pumps 40 per cent of the world’s oil.
On Thursday, Opec trimmed its 2008 estimate of world oil demand growth, citing higher prices and slower economic momentum in major industrialized countries including the United States.
Global oil demand was projected to grow by 1.35 per cent in 2008, compared with a previous estimate of 1.4 per cent, Opec said in a monthly survey.
The oil market was also supported by strong demand from China and a weak US currency.
On Tuesday, the International Energy Agency suggested growth in global oil demand would slow this year.
The IEA, an energy policy adviser to major industrialised countries, predicted that crude demand in 2008 would stand at 86.8 million barrels per day (bpd) -- about 390,000 bpd less than its previous estimate given in April.
By Friday, New York’s main oil futures contract, light sweet crude for delivery in June, had jumped to $127.43 from $124.80 a week earlier.
Brent North Sea crude for June was at $126.07, from $124.39 the previous week.
PRECIOUS METALS: Gold prices hit a two-week high of $903.72 on Friday as oil prices surged higher.
High crude oil prices raise fears about inflation and encourage investors to buy gold, which is widely regarded as a good store of value.
Platinum also enjoyed solid gains owing to supply disruptions in key exporter South Africa.
On the London Bullion Market, gold climbed to $897 per ounce at Friday’s late fixing from $876 a week earlier.
Silver eased to $16.83 per ounce from $16.97.
On the London Platinum and Palladium Market, platinum rallied to $2,136 per ounce at the late fixing on Friday from $2,079 a week earlier.
Palladium advanced to $443 per ounce from $437.
BASE METALS: Base metals prices were mixed, but star performer tin hit a historic high on the back of dwindling global stockpiles, traders said.
On Thursday, tin hammered a record peak of 25,500 dollars per tonne -- the highest point since 1989 when it was re-introduced on the London market.
The new record beat the previous high of $24,602 that was hit on April 24.
Tin prices continue to post impressive gains ... moving closer towards our short-term price target of 27,000 dollars, said Barclays Capital analysts.
Supply problems continue to plague the tin market and coupled with the downtrend in stocks ... prices look poised for further gains in our view.
By Friday, copper for delivery in three months fell to 8,296 dollars per ton on the LME from 8,300 dollars a week earlier.
Three-month aluminium gained to $3,010 per tonne from $2,875.
Three-month nickel fell to $26,305 per ton from $27,450.
Three-month lead dropped to $2,276 per ton from $2,320.
Three-month zinc climbed to $2,318 per ton from $2,218.
Three-month tin rallied to 25,300 dollars per ton from $24,475.
COCOA: Cocoa prices turned lower after recent bumper gains, as speculators unwound their positions.
By Friday on LIFFE, London’s futures exchange, the price of cocoa for July delivery dipped to 1,458 pounds per tonne from 1,492 pounds a week earlier.
On the New York Board of Trade (NYBOT), the July cocoa contract decreased to $2,665 per ton from $2,736 .
COFFEE: Coffee prices steadied amid solid buying interest.
By Friday on LIFFE, Robusta for July delivery increased to $2,265 per ton from $2,243 a week earlier.
On the NYBOT, Arabica for July delivery eased to 137.90 US cents per pound from 138 cents.
SUGAR: Sugar prices weakened on the prospect of a vast surplus of the commodity.
By Friday on LIFFE, the price per ton of white sugar for August delivery fell to 331.10 pounds from 337 pounds the previous week.
On NYBOT, the price of unrefined sugar for July delivery declined to 11.10 US cents per pound from 11.76 cents.
GRAINS AND SOYA: Grains and soya prices diverged as traders kept their eye on prevailing weather conditions in key producer the United States.
By Friday on the Chicago Board of Trade, maize for July delivery slid to $6.01 per bushel from $6.29 the previous week.
July-dated soyabean meal -- used in animal feed -- rose to $13.95 from $13.58.
Wheat for July delivery eased to $7.82 per bushel from $8.04.
RUBBER: Rubber prices bounced higher, supported by limited supplies amid the wintering season -- a period of low harvest in key Asian producing countries, traders said.
On Friday, the Malaysian Rubber Board’s benchmark SMR20 increased to 288.90 US cents per kilo from 278.35 a week earlier.—AFP