December 2, 2001	Sunday	Ramazan 16, 1422

LONDON, Nov 30: Oil prices regained some of their value this week amid concern that Iraq could be the next target in the US-led war on terrorism — a move that could provoke a backlash among Arab oil-producing countries.

But a six-month rollover of the UN oil-for-food deal with Iraq helped quell concerns about an Iraqi export halt.

Meanwhile, there was no visible progress made by world crude producers trying to thrash out an output-cutting deal.

The spectacular downfall of US energy titan Enron caused a stir in the oil and metals markets as traders tried to assess the potential impact.

The base metals complex was one beneficiary, while gold prices gained as the dollar came under pressure.

GOLD: Gold prices gained as the dollar wobbled.

By Friday afternoon, an ounce of gold stood at $275.5 from $273.1 a week earlier.

“Gold is negatively correlated with a lot of financial instruments, be it the US dollar, be it bond yields and so on and given the fact that they’re just easing back a fraction, that would account for why gold’s up a dollar or two,” said HSBC metals expert Alan Williamson.

“Trade has been very very thin,” he told AFP.

“You’ve had the dollar weakening a little bit just at the same time that gold was getting down to support levels, so the fact that it held about $273 is fairly significant as well.”

SILVER: Silver prices regained some lustre.

An ounce of silver was going for $4.14 on Friday afternoon, from $4.0905 the previous week.

“Silver obeys no known laws of supply and demand,” Williamson said.

“It’s price is almost solely dictated by what the funds do. If the funds decide to go long, the price goes up 50 cents. If they decide to go short, it goes down 50 cents. What triggers those fund movements is impossible to say.”

PALLADIUM AND PLATINUM: The platinum group metals (PGMs) clocked up modest gains thanks to fund buying and industrial demand, but action was muted, analysts said.

“The trading in the PGMs has been very very thin,” Williamson said.

“We have seen some short covering on the NYMEX (New York Mercantile Exchange).

“We’ve also seen the beginnings of some industrial buying at the low levels, so the car companies have been coming in looking to buy metals.”

Automakers, which use PGMs in auto catalysts, are an important source of demand for the market, but one that has waned this year.

By Friday, platinum prices stood at $443 an ounce from $434 a week earlier.

Palladium was quoted at $338 an ounce from $330 the previous week.

OIL: Oil prices clawed back some lost ground amid worries that Iraq could be a future target of the US-led war on terrorism, bringing renewed concerns that Arab oil producers could be drawn into a wider conflict.—AFP