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LONDON, July 13: Oil prices rose this week after two weekly reports revealed an unexpectedly steep decline in US stocks.
That helped offset further turbulence in US equities, although analysts warned that it could come back to haunt the markets if it were to have an adverse effect on demand in the world’s biggest oil consuming nation. The slide in stocks to their lowest level in five years boosted demand for gold and silver, as investors sought a safer haven for their cash. The price of the two metals was bolstered further by weaker US dollar.
However, worries over the negative implications of the collapse in stock prices for the fragile recovery in the world economy pushed leading base metals prices down, as investors fretted over the risk of weakening industrial demand.
GOLD: Gold prices rose as a weaker US dollar boosted demand for the precious metal.
The continued rout in global equity markets bolstered prices further as investors were left seeking safer havens for their funds.
By Friday afternoon, gold was fixed at $316.70 an ounce against $311.30 the previous week.
SILVER: Silver prices rose through the psychologically significant level of five dollars per ounce on Friday, aided by the rally in gold prices.
Silver followed developments in the gold market very closely. All week long it followed gold, sliding at the beginning of the week before rising through the key five dollar level, said Naqvi.
PALLADIUM and PLATINIUM: Platinum prices rose in tandem with other precious metals, shrugging off concerns about the knock-on effect of weaker equity markets on industrial demand.
Palladium prices rose to $322 per ounce from $321 a week erlier.
BASE METALS: Base metals had contrasting fortunes this week, with copper hitting the skids, aluminium stabilising and a modest rally in the majority of the other metals prices.
Copper, which along with aluminium is the most heavily traded of the base metals, fell back in response to the turmoil hitting equity markets across the globe, said Societe Generale analyst Stephen Briggs.
OIL: Oil prices rose last week, buoyed by data that revealed an unexpectedly steep decline in US inventory levels.
Brent crude for August delivery stood at $26.29 from $25.53 a week earlier.
In New York, August-dated light sweet crude futures traded for $27.25 from $26.80 a barrel.
The market was invigorated by weekly data from both the American Petroleum Institute and US Energy Department, which estimated US stocks had fallen by 6.1 and 4.2 million barrels respectively.
Those findings compared with market expectations for a much more modest decline and were said to have prompted aggressive buying by institutions, particularly in New York.
The effect was compounded Friday by a monthly report from the International Energy Agency which estimated that after three years of limp growth, demand for oil was set to grow sharply, by as much as 1.1 million barrels per day, in 2003.
RUBBER: Rubber prices ended the week virutally unchanged.
Syminton analyst Martin Hampson said the week started with prices drifting down in quiet conditions before a report that the Thai government had sold its stock of 130,000 tons pushed prices sharply lower.
COCOA: Cocoa prices held at 15-year highs this week in London, principally as a result of technical factors, but also on hopes of a continued shortage in the market ahead of the harvest of the Ivory Coast crop.
COFFEE: Coffee prices rose sharply this week as forecasts that bad weather could be set to affect some of the Brazilian growing regions encouraged a technical rebound from recent lows.
SUGAR: Sugar prices rose this week, profiting from a shortage of shipments from Brazil and Thailand.
There is a contrast in the market at the moment: Brazil and Thailand are making it difficult to get hold of their sugar, which is boosting prices at a time when the market is expecting a surplus owing to a bumper crop in 2002, said Chris Pack, analyst at brokerage firm Czarnikow.
SOYA: US soya prices forged higher, as investors ignored forecasts of rain in the US growing regions, which have been experiencing a hot and dry period that would be favourable to this year’s crop.
GRAINS: Wheat prices rose this week in Chicago, profiting from the hot and dry weather that has hit the US MidWest, the country’s main producing region, for much of the week.
The market has its eyes glued to the weather conditions, said Don Roose, an analyst at brokerage firm US Commodities.
COTTON: Cotton prices rose in quiet technical trade, with the market said to have been underpinned by a weaker dollar favourable to US exporters but held back slightly by the activities of speculative funds.
Figures from the US agriculture department Thursday, showed sales in the latest week fell 43 per cent to 29,100 bales.
Meanwhile, exports fell 31 per cent to 128,200 bales.
In New York, the October contract climbed to 47.05 cents a pound on Thursday from 46.06 cents the previous week.
The Cotton Outlook Index of physical cotton, the average of the world’s lowest prices, rose to 47.10 cents a pound from 46.40 cents the week before.
WOOL: Wool prices edged slightly lower this week.
The fundamental factors were unchanged. Demand stayed firm while industrial buyers covered their positions ahead of the two-week closure of the Australian market, said the Australian Wool Industries Secretariat (AWIS).
The Australian Eastern index eased to 905 cents per kilo from 903 a week earlier.
The British Wooltops index slipped back to 475 pence from 477.—AFP
