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LONDON, March 29: Oil prices turned tail and bounded higher this week as initial hopes of a quick end to the war in Iraq faded and concerns mounted about disruption to Nigerian supplies.
But gold prices failed to cash in significantly on heightened worries about the prospect of a long war in Iraq.
Among soft commodities, activity was muted as war deterred trade players, leaving speculators and investment funds to determine the direction of most markets.
GOLD: The gold market remained relatively stable as traders watched movements in the war with Iraq.
By Friday afternoon, gold had slipped to 330.75 dollars per ounce on the London Bullion Market from 333.50 dollars the previous week.
Gold has been very stable, though it saw some profit-taking on Thursday, said Ingrid Sternby, an analyst with Barclays Capital.
The development of the war in Iraq is a key driver.
The renewed pressure seen on the dollar might signal that the downside risk in the near term is limited, she added, referring to a weakening of the US currency which is often a factor supporting gold.
SILVER: Silver prices dipped in line with gold, suffering also from poor demand from the industrial sector.
Fund selling ... pushed silver down whereas physical buying limited the fall again, said Moore.
Silver has been largely neglected and the industrial metal is going to remain susceptible to further losses as industrial demand is still incredibly low.
PLATINUM AND PALLADIUM: Platinum prices fell this week on factors including a poor outlook for the auto industry.
On Friday, the price of an ounce of platinum stood at $636 on the London Platinum and Palladium Market against $662 the previous week.
On Friday, Palladium prices stood at $196, against $226 the week before.
BASE METALS: Base metal prices slipped back this week due to uncertainties over the outlook for economic activity and demand for raw materials.
After a period of resilience, base metal prices have fallen sharply over the past days and the pressure is likely to remain, said Barclays Capital analyst Ingrid Sternby.
On the London Metal Exchange (LME), three-month copper prices fell to $1,601 per ton from $1,704 the previous week.
Three month aluminium prices dipped to $1,349 per ton from $1,386.
Three month nickel prices fell to 7,770 dollars per ton from $8,300.
Three month zinc prices slipped to $777 per ton from 809.
Three month tin prices lurched down to $4,510 per ton from $4,660.
Three month lead prices sagged to $451 per ton from $468.
OIL: After plunging the previous week, oil prices rebounded in volatile trading as initial hopes of a quick war in Iraq evaporated and concerns mounted about civil unrest in African producer Nigeria.
The price of benchmark Brent North Sea crude oil for May delivery climbed to $26.51 a barrel in late London trading on Friday from $24.80 a week earlier.
In New York, reference May-dated light sweet crude futures gained to $30.20 per barrel from $27.20 the previous week.
The unrest has forced oil majors in the country to slash output by around 800,000 barrels per day, a large chunk of Nigeria’s normal daily oil output of about two million barrels.
RUBBER: Rubber prices edged lower in listless trading.
Rubber this week has been quite overshadowed by the war in Iraq, said Martin Hampson, analyst with brokers Symington.
So the market has been quite subdued and if anything the prices have been subsiding slightly but obviously with resistance from the producers, he added.
In Kuala Lumpur, the RSS index fell to 3.970 ringgit per kilo on Thursday from 4.020 the previous week.
COCOA: Cocoa prices recoiled to the lowest level for three months in volatile trading, analysts said.
All sides took part in the fray, but most of the direction was determined by speculators and industry players, said Refco analyst Ann Prendergast.
On LIFFE, London’s financial futures exchange, the price of cocoa for May delivery eased to 1,248 pounds a tonne on Thursday from 1,323 the previous week.
On the CSCE, the New York futures market, the May contract retreated to $1,911 per ton from $2,029.
COFFEE: Coffee prices sank owing to a lack of technical and fundamental support, analysts said.
Coffee futures continued to deteriorate under the aegis of fund and local selling, said Prendergast.
On LIFFE, Robusta quality for May delivery fell to $706 per ton on Thursday from $762 the previous week.
SUGAR: Sugar prices slipped as investment funds squared their positions ahead of the end of the first quarter, traders said.
Fimat analyst Fernando Martins in New York said trade buying and demand from consumers such as Russia should reassert their positive influence on prices after the sales by investment funds peak.
Trading volumes had fallen significantly since the start of the war in Iraq with few large shipments to the Middle East, where buyers have been stocking up since September, he added.
On LIFFE, a tonne of white sugar for May delivery fell to $215 on Thursday from $220 a week earlier.
On the CSCE in New York, a pound of unrefined sugar for May delivery dropped to 7.46 cents from 7.75 cents the previous week.
SOYA: US soya prices gained on fund buying ahead of the publication Monday by the US Department of Agriculture of producer sowing forecasts and quarterly stock estimates.
On the Chicago Board of Trade (CBoT), a bushel of soya for May delivery rose to 580.25 cents from 574.50 the previous week.
Soyabean meal — used in animal feed — for May delivery increased to $173.70 per ton from 172.10 the previous week.
GRAINS: Cereal prices generally fell over the week on factors including more forecast rain in the Midwest of the United States, beneficial to crops ahead of sowing in April.
However wheat edged marginally in London upwards in the absence of any real news, analysts said.
In Chicago, a bushel of wheat for May delivery fell to 283.50 cents from 294.75 cents the week before.
A bushel of maize in Chicago for May delivery drooped to 228.75 cents from 233.75 cents a week before.
On LIFFE, the price of a tonne of wheat for May delivery edged up to 64.95 pounds from 64.85 pounds the preceding Thursday.
COTTON: Cotton prices fell back during the week, crossing a series of technical support thresholds on selling by speculative and investment funds.
Trade (players) were not aggressive buyers and speculators and funds sold, said Refco analyst Ann Prendergast.
According to the US Department of Agriculture, net upland cotton sales for the week to March 20 rose 24 per cent against the preceding seven days, with China the main purchaser.
In New York, the May outlook fell to 56.00 cents a pound from 58.80 the previous week.
The Cotton Outlook Index of physical cotton, the average of the world’s lowest prices, slipped to 61.45 cents from 61.65 cents the week before.
WOOL: Australian wool prices picked up after four weeks of falls, gaining 1.6 per cent on average at auctions in Sydney, Melbourne and Fremantle, the Australian Wool Industries Secretariat (AWIS) said.
Topmakers were to the fore this week followed by buyers for China. Business for Europe appeared to be lighter than in the previous week, the trade body reported.
The Australian Eastern index rose to 10.61 Australian dollars per kilo from 10.51 the previous week.
But the British Wooltops index fell to 558 pence from 578 pence. —AFP
