LONDON, April 12: The downfall of the Iraqi regime bore down on world oil prices this week on the prospect of a resumption of crude exports from the country.
The negative pressure was partially offset however by signs that the Opec producer cartel is preparing to rein in supply to try to ward off a price collapse.
An easing of tensions on global financial markets over the situation in Iraq triggered some selling of commodities such as gold and rubber which had benefited from so-called safe-haven flows.
But the relatively muted response of world stock markets to the collapse of Saddam Hussein’s rule limited the effect, and gold prices finished the week slightly higher.
GOLD: Gold prices climbed slightly as concerns about prospects for the US economy overshadowed an easing of tensions over the situation in Iraq on world markets after the fall of Baghdad to US-led forces.
By Friday afternoon, gold stood at $324.80 per ounce on the London Bullion Market from 323.80 dollars the previous week.
Gold rallied a few dollars off its lows despite the fact that the war in Iraq seems to be heading towards a rapid conclusion, said UBS Warburg analyst John Reade.
I think investors or traders’ attention is starting to turn towards the economic outlook.
A string of disappointing US economic data sparked renewed speculative interest in the precious metal, though these were offset by better-than-expected retail sales and consumer confidence figures on Friday.
Dips in the value of the dollar also lured in buyers in Europe and Asia, analysts said.
SILVER: Silver prices rose, outshining the other precious metals.
Silver was trading on the London Bullion Market at $4.4650 an ounce on Friday against $4.3900 the previous week.
Reade said there was potential for silver prices to recover up to around $4.6470 in the next week or two.
PLATINUM AND PALLADIUM: Platinum headed south in the early part of the week but managed to regain some poise by the weekend thanks to firm physical demand, notably from China.
On Friday, the price of an ounce of platinum stood at $622 on the London Platinum and Palladium Market against $616 the previous week.
Platinum continued to sell off in the first part of the week, getting down to a low of $607 an ounce, but it recovered ground and stabilised between $620 and 630 an ounce, said Reade.
But palladium prices drifted down to $168 from $175 the week before.
Palladium has remained weak generally. It has found some support around $170 an ounce level after falling under 200 in the middle of March. I am not sure that there is any buying around, it may just be an indication that the selling has stopped, said Reade.
BASE METALS: Base metal prices mostly held steady, stabilising after falls the previous week despite renewed worries about signs of weakness in the US engine of global economic growth.
There seems to be supportive consumer buying in the market, particularly for copper and aluminium on Thursday when the dollar weakened a bit towards the euro, said Barclays Capital analyst Ingrid Sternby.
On the London Metal Exchange (LME), three-month copper prices stood at $1,592 per ton from $1,590 the previous week.
Three-month aluminium prices rose to $1,337 per ton from $1,332.
Three-month nickel prices firmed to $7,920 per ton from $7,890.
Three-month zinc prices inched up to $770 per ton from $768.
Three-month tin prices dipped to $4,535 per ton from $4,560.
Three-month lead prices rose to $447 per ton from $445.
OIL: Oil prices edged slightly downwards over the week as hopes Iraq’s crude could soon begin to flow again was partially cancelled out by the possibility of industry cartel OPEC shoring up prices by slashing production.
The price of benchmark Brent North Sea crude oil for May delivery fell to $24.38 a barrel in late London trading on Friday from $24.70 a week earlier.
In New York, reference May-dated light sweet crude futures eased to $27.24 per barrel from 28.25 dollars the previous week.
Oil production in the south of Iraq could restart sooner than expected,he added.
The cartel is keen to avoid a precipitous slide in oil prices of the sort that followed the end of the 1991 Gulf conflict.
On Friday an Opec source told AFP that Opec could slash production by two million barrels a day if it was to stick rigidly to its production quotas.
RUBBER: Rubber lost ground during in week, in part due to successes for US-led forces in Iraq.
It seems that with the positive aspect in the war in Iraq, commodities in general are losing their appeal as safe-haven markets and this affects rubber as well, noted Martin Hampson, an analyst with brokers Symington.
With the war out of the way, the market is looking back at the economic fundamentals and as economies in the (United) States and in Europe are not doing very well, that is a negative factor for the market, he added.
In Kuala Lumpur, the RSS index fell to 3.805 ringgit per kilo on Thursday from 3.880 the previous week.
COCOA: Cocoa prices were mixed over the week in a volatile market punctuated by technical movement, as well as new tensions in Ivory Coast.
Prices slipped as low as 1,930 dollars in New York but then rebounded strongly, said Ann Prendergast, an analyst with the Refco brokerage.
This strengthening was boosted by the flare-up in violence in Ivory Coast.
On the CSCE, the New York futures market, the May contract firmed to $1,963 per ton from $1,937.
COFFEE: Coffee prices slid somewhat over the week on sales by speculators, amid a lack of new factors to provide other movement.
The market stayed mainly in a “steady trading pattern”, said Refco’s Prendergast, despite factors including a fall in monthly exports from Brazil and the possibility that Mexico’s crop might be far lower than forecast.
SUGAR: Sugar prices slipped during the week on sales by investment funds.
Prices had initially increased, but before long the same pattern of fund selling re-emerged, according to analysts at the brokerage Sucden.
The opening of (the southern Iraqi port of) Umm Qasr could herald a little interest for various goods, including sugar, they also noted.
On LIFFE, a ton of white sugar for May delivery was down to $203.50 on Thursday from $216.00 a week earlier.
On the CSCE in New York, a pound of unrefined sugar for May delivery slipped to 7.20 cents from 7.73 cents the previous week.
SOYA: Soya prices rose on purchases by investment funds in a week of consistently strong demand.
On the Chicago Board of Trade (CBoT), a bushel of soya for May delivery rose to 601.00 cents from 585.25 the previous week.
Soyabean meal — used in animal feed — for May delivery rose to $177.70 per ton from 171.90 the previous week.
GRAINS: Grain prices generally rose over the week on speculative buying as well as meteorological conditions.
Dry weather in the western part of the US’s Great Plains wheat belt contributed, as the crop thrives in damper conditions.
COTTON: Cotton prices rose during the week on factors including better-than-expected US export figures from the US Department of Agriculture (USDA).
May cotton futures jumped higher on Thursday as good USDA exports and supply demand reports boosted buyer confidence, said analyst Ann Prendergast of brokers Refco.
According to the USDA, cotton exports for the week ending April 3, were two per cent up on the previous week and 27 per cent above the previous four-week average.
If the market is unable to breach this level on successive attempts, there could be a turn back to lower levels seen earlier in the week, she said.
In New York, the May outlook rose to 57.92 cents a pound from 57.60 the previous week.
The Cotton Outlook Index of physical cotton, the average of the world’s lowest prices, was unchanged at 61.20 cents.
WOOL: Wool prices fell in Australia, the world’s major wool producer, as increased quantities were brought to the market ahead of its closure for Easter.
Some business was done with Europe throughout the week, but China was conspicuous by its absence, it added.
The Australian Eastern index slipped to 10.79 Australian dollars per kilo from 10.93 the previous week.
The British Wooltops index rose to 578 pence from 558 pence the week before.—AFP
