LONDON, April 19: Oil prices rose slightly over the truncated pre-Easter week as expectations of an output cut by the Opec cartel overshadowed the effective end to the US-led war on Iraq.
Gold prices were boosted by a softer dollar, while base metals benefited from technical factors and hopes of an improvement in the global economy.
But trading was muted on many markets during the four-day week and with the war in Iraq all but officially over.
Major markets in Europe closed late on Thursday, due to reopen early Tuesday. Markets in New York and parts of Asia also shut on Friday.
OIL: Signs that the Opec oil cartel is preparing to tighten the taps offset the negative influence of the possibility of a swift resumption of Iraqi oil exports, which some experts warned could in any case take longer than expected.
The price of benchmark Brent North Sea crude oil for June delivery climbed to $25.40 a barrel in late London trading on Thursday from $24.77 a week earlier.
In New York, reference May-dated light sweet crude futures rose to $29.60 per barrel from $28.14 the previous week.
Oil ministers from members of the Organization of Petroleum Exporting Countries (Opec) meet in Vienna on Thursday (April 24) to discuss a possible output cut of up to two million barrels per day, according to sources close to the cartel.
“There is an expectation that they will either reduce output by cutting their quotas or by improving (quota) compliance,” said Commerzbank analyst David Thomas.
“The Opec countries have enjoyed their period of having a high market share and they will be concerned about losing it.
“But the cutting of the output should be nothing more than just getting back to normal levels after a period of increased production to offset (the loss of) Iraqi crude,” he added.
Talk of an Opec production cut overshadowed events in Iraq, where oil workers were set to return to work over the weekend at wells near the northern city of Kirkuk to allow production to begin again within the coming weeks after the shutdown triggered by the US-led invasion.
GOLD: Gold prices gained from a weaker dollar and jittery stock markets as investors turned their attention away from Iraq.
By Thursday afternoon, gold stood at $327.0 per ounce on the London Bullion Market from $324.80 the previous Friday.
“Now that Iraq is out of the way, it is back to following stock markets, economic news and the movement of the dollar,” said SG Securities analyst Stephen Briggs.
“When the dollar goes down, gold goes up; if economic news is bad, gold goes up; and if stocks are down, gold goes up, and vice-versa,” he said.
A fall in the value of the US currency tends to boost the price of gold, which is traded in dollars on world markets, because it makes the precious metal more attractive to buyers in Europe and Asia.
SILVER: Silver prices climbed, breaking above $4.5 per ounce mid-week before giving up some of its gains.
Silver was trading on the London Bullion Market at $4.480 an ounce on Thursday against $4.465 the previous week.
BASE METALS: Base metal prices picked up on technical factors and the effective end to the war in Iraq, which helped assuage concerns about the
outlook for the global economy and hence demand for base metals.
“Nothing fundamentally has changed but there has been a slight change of sentiment, a relief that the war is over and has not been too messy,” said SG Securities analyst Stephen Briggs.
On the London Metal Exchange (LME), three-month copper prices advanced to $1,626 per ton from $1,592 the previous week.
SUGAR: Sugar prices improved over the week after initially slipping due to industry support and a cessation of fund selling.
Prices had fallen as funds sold positions ahead of the expiry of the May sugar contract, said analyst John Kovaks from the Czarnikow brokerage.
“But then, we saw some good trade support and the fund selling stopped as the market was seen to be over-sold, which lifted the prices,” he said.
On LIFFE, a ton of white sugar for August delivery rose to $209.80 from $206.30 a week earlier.
On the CSCE in New York, a pound of unrefined sugar for May delivery strengthened to 7.39 cents from 7.20 cents the previous week.
COTTON: Cotton prices rose in New York during the week on technical buying and the expectation of a reduced harvest this year.
Refco analyst Ann Prendergast said US cotton futures had risen on “a wave of technical buying.”
But the Cotton Outlook Index of physical cotton, the average of the world’s lowest prices, slipped to 60.90 cents from 61.20 cents the week before.—AFP
