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LONDON, Oct 12: Oil prices see-sawed this week as traders followed the latest developments in the US-Iraqi stand-off, ending the week lower in New York but little changed in London.
Gold and silver prices lost ground on waning speculative interest.
But cocoa prices continued to race higher as violence continued in leading producer Ivory Coast.
GOLD: Gold prices eased on waning speculative interest, failing to gain from ongoing stock market volatility.
Gold prices were fixed at $316.85 per ounce on the London Bullion Market on Friday against $320.30 the previous week.
One of the reasons why speculative funds moved into gold was the expectations of weak data leading to higher prices — that hasn’t particularly happened, said Barclays Capital analyst Howard Patten.
If the reasons which lead speculative funds into the gold market disappear, i.e if the dollar gets a bit stronger, the data is a bit better, that speculative summit in the gold price is just going to melt away, he added.
SILVER: Silver prices slid to the lowest level since early February owing to speculative pressure, analysts said.
Silver was fixed on the London Bullion Market at 4.2950 dollars an ounce on Friday afternoon, against 4.4750 the previous week.
PLATINUM AND PALLADIUM: Platinum prices rose to levels not seen for one and a half years, boosted by rising lease rates, though palladium prices stagnated.
We have had an increase in lease rates in the platinum market and they’ve moved over 12 per cent over the last few days which is fairly high for platinum, said Patten.
The lease rate increase just reflected those tighter borrowing conditions, spot prices moved up and that also triggered some stops (stop-loss buying) and some short covering, he added.
By Friday, an ounce of platinum stood at $592 on the London Platinum and Palladium Market against $557 a week earlier
Palladium prices traded at $320 per ounce from $314.
BASE METALS: Base metals prices were mixed this week, with most prices confined to relatively narrow trading ranges with the exception of tin, whose price shot up reflecting the fact its production has been declining dramatically owing to the closure of a number of mines.
Barclays Capital analyst Ingrid Strenby said copper and aluminium prices had risen towards the end of the week following a solid recovery in US stock prices and reasonable US economic data.
But she added that trading activity had been very quiet with many traders and investors attending conferences organised by the London Metal Exchange.
Strenby said tin prices continued to be buoyed by the closure of a number of the world’s production sites which had led to a sharp drop in world supplies.
On the London Metal Exchange (LME), three-month copper prices rose to $1,488 per ton from $1,463 the week before.
Three-month aluminium prices edged up to $1,311 per ton from $1,306.
Three-month nickel prices fell to $6,460 per ton from 6,610, zinc rose to $764 per ton from $759, lead rose to $435 per ton from 422, while tin jumped to $4,390 per ton from 4,170.
OIL: Oil prices zig-zagged as traders girded themselves for a possible US invasion of Iraq.
By Friday afternoon, Brent crude for November delivery stood at $28.00 a barrel, against $27.96 a week earlier.
In New York, November-dated light sweet crude futures traded at $29.14 down from 29.68 a week earlier.
Prices spiked up at the start of the week on news of an explosion on the French oil tanker Limburg off the coast of Yemen which traders worried was the work of terrorists.
But the rally quickly fizzled out, leaving the market to monitor sabre-rattling between Washington and Baghdad.
Prices eased on Thursday after Iraq invited the United States to inspect two sites where Washington suspects Baghdad of having resumed its prohibited weapons programmes.
But they bounced back slightly before the weekend after the US Congress gave President George W. Bush authority to go to war against Iraq.
Meanwhile, the International Energy Agency lowered its forecasts for global oil demand growth to reflect the slowdown in the US and world economic recovery and the impact of higher oil prices on consumer demand.
The Paris-based agency said in its monthly report it was lowering its forecast for global oil demand growth by 50,000 barrels per day this year and by 100,000 bpd next year.
But traders said the report had had little impact on prices.
RUBBER: Rubber prices inched lower amid weak demand and rising production, notably in Thailand, traders said.
In Kuala Lumpur, the RSS index fell to 3.195 ringgit per kilo from 3.235 ringgit the previous week.
COCOA: Cocoa prices hit a new 17-year high as a bloody three-week-old uprising raged in Ivory Coast, which produces 40 per cent of the world’s cocoa crop.
More than 2,000 Burkina Faso nationals fled cocoa plantations in the western Ivory Coast region of Duekoue, raising concerns for the upcoming harvest.
There seems to be little question now but that the cocoa-growing regions will be affected both by the exodus of Burkinabe farmers and the spread of war, said Ann Prendergast, analyst at brokers Refco.
Without intevention to stop the chaos, prices will inevitably rise further, she added.
On LIFFE, London’s financial futures exchange, the price of cocoa for December delivery climbed to 1,605 pounds a tonne on Thursday from 1,524 the previous week.
On the CSCE, the New York futures market, the December contract rose to $2,374 per ton from $2,215.
COFFEE: Coffee prices pushed higher in New York amid concern about dry weather in Brazilian producer regions, but ended lower in London.
Fresh falls in the value of the Brazilian real, which touched a new record low, boosted the country’s export sales.
The market was also looking ahead to the second round of Brazil’s presidential runoff vote on October 27 between leftist Luiz Inacio Lula da Silva and government candidate Jose Serra.
Traders are concerned that a Lula victory could impact on the value of the real and the country’s coffee policies.
On LIFFE, Robusta quality for November delivery eased to 628 dollars a ton on Thursday from $650 the previous week.
On New York’s CSCE market, Arabica for December delivery rose to 57.40 cents a pound on Thursday from 56.45 cents the previous week.
SUGAR: Sugar prices rose this week on renewed speculative buying, traders said.
On LIFFE, a tonne of white sugar for December delivery rose to $199.30 on Thursday from 196.80 a week earlier.
On the CSCE in New York, a pound of unrefined sugar for January delivery climbed to 7.30 cents from 6.91 cents the previous week.
The funds appear to be buying, said Czarnikow broker John Kovaks.
There’s a lot of money in the speculative sector in sugar because of the poor performance of the stock markets, he added.
But he warned that following the recent rally in prices the market was starting to look increasingly overbought.
The world sugar market is suffering from a glut this year following large harvests in Brazil, South Africa and the European Union.
Brazilian exports rose to 1.61 million tons in September, 41 per cent more than in the same month a year earlier.
According to brokers Ed and F Man world sugar production in 2002/03 is expected to rise by four per cent to 142.28 million tons compared with demand of around 136.86 million tons.
The surplus has led to a 24.7 per cent fall in sugar prices so far this year, the Economist Intelligence Unit said this week, although it went on to predict a 5.9-per cent rise in prices next year as demand rose.
SOYA: Soya prices dropped as the market awaited the publication of monthly agricultural production data by the US agriculture department (USDA).
Prices fell sharply on Wednesday but recouped some of those losses a day later after the USDA said US soya exports rose by 50 per cent to 516,300 tons in the week to October 3.
On the Chicago Board of Trade (CBoT), a bushel of soya for November delivery fell to $5.25 on Thursday from 5.38 a week earlier.
Soyabean meal — used in animal feed — for October delivery fell to 162.30 dollars per ton from 166.70 the previous week.
GRAINS: Wheat prices fell back this week in Chicago as the discovery of a fungus within a shipment of grain from the United States raised concern that US exports could be hit.
Mexican officials reportedly found a consignment of wheat from the United States had been contaminated by a fungus — Karnal bunt.
One trader said there were fears the fungus had been found in a consignment of winter wheat from Illinois which would represent the first time the fungus had been traced to the region.
In Chicago a bushel of wheat for December delivery fell to 365.75 cents from 374.75 cents a week earlier.
A bushel of maize in Chicago for December delivery fell to 251.50 cents from 254.50 the previous week.
On LIFFE, the price of a ton of wheat for November delivery rose to 60.20 pounds from 59.70 a week earlier.
COTTON: Cotton prices fell this week as the US government said Hurricane Isidore would have a limited impact on the US harvest of the crop.
Cotton prices had risen the week before on worries that the US crop may have been badly damaged by the two recent storms to hit US growing regions in the southern United States.
The US agriculture department (USDA) said the 2002/03 harvest is likely to have fallen around 0.3 per cent compared with its previous forecast in September.
The USDA is forecasting this year’s harvest in the United States will rise to 18.07 million bales.
In New York, the December contract fell to 43.54 cents a pound on Thursday from 44.26 the previous week.
And the Cotton Outlook Index of physical cotton, the average of the world’s lowest prices, slipped to 48.65 cents a pound from 49.25 the week before.
WOOL: Wool prices fell for the first time in almost two months this week following a sharp increase in the quantity of fibres on offer.
The fall came after prices rose to their highest level in 14 years the week before in response to the ongoing drought in Australia.
The high prices have brought a lot of older wool onto the market, a trend which is likely to continue at present prices, said the Australian Wool Industries Secretariat.
It added that buyers for China were again prominent, followed by the topmakers, although business with Europe remained “subdued”.
The Australian Eastern index fell to 11.49 Australian dollars per kilo on Thursday from 11.78 cents a week before.
The British Wooltops index rose to 560 pence from 553. —AFP
