Oil prices hit all time high $68 on hurricane fears
LONDON, Aug 27: Oil prices hit a $68 high point this week on the back of hurricane weather, threatening crucial Gulf of Mexico oil rigs, and amid lower-than-expected US gasoline stocks.
Tightening supply conditions and fierce global demand, particularly from Asia and the United States, conspired to send oil prices to the record level in New York.
Silver and coffee prices, meanwhile, slumped to multi-month lows.
The Commodities Research Bureau’s index of 17 commodities climbed to 319.04 points on Friday from 312 points the previous week.
GOLD: Gold prices eased while the US dollar gave up just 0.5 per cent of its value against the euro over the week.
“Gold continues to slip lower in euro terms although the metal remains in a range against a weakening US dollar,” UBS analyst John Reade said.
A weaker dollar traditionally makes gold, which is priced in the US currency on world markets, more attractive to buyers using other currencies.
On the London Bullion Market, gold prices fell to 438.85 dollars per ounce at the late fixing on Friday from 447.25 dollars the previous week.
SILVER: Silver prices sank on further evidence that the boom in digital photography has slashed demand for developing camera films.
“Silver was the worst performer among the precious metals,” said Barclays Capital analyst Sudakshina Unnikrishnan. “Evidence of fundamental deterioration came from news that Eastman Kodak is shedding another 900 jobs.”
The US photography giant said it was cutting manufacturing operations in the US and China. Photography accounts for some 20 per cent of the market.
On the London Bullion Market, silver prices fell to 6.845 dollars per ounce at the late fixing Friday — its lowest level since February 10 — from 6.995 dollars the previous week.
PLATINUM AND PALLADIUM: Platinum and palladium prices stabilised.
“The platinum group metals are largely unmoved in quiet trading,” said Barclays Capital analyst Yingxi Yu.
Reade said palladium was beset with “poor supply and demand fundamentals”.
By Friday, platinum prices rose to 894 dollars per ounce on the London Platinum and Palladium Market from 887 dollars the previous week.
Palladium prices stood at 183.50 dollars per ounce on Friday from 184.50 dollars.
BASE METALS: Base metals prices mostly gained ground as copper pushed higher.
“Another week, another rally in copper prices dragging the rest of the complex higher,” noted Metal Bulletin Research analyst Andrew Cole. Copper held above 3,600 dollars, not far from its record of 3,663 dollars from August 16.
By Friday, three-month copper prices rose to 3,608 dollars per ton on the London Metal Exchange from 3,578 dollars the previous week.
Three-month aluminium prices eased to 1,893 dollars per ton Friday from 1,895 dollars.
Three-month nickel prices stood at 14,860 dollars per ton on Friday from 14,780 dollars.
Three-month lead prices climbed to 875 dollars per ton Friday from 853 dollars.
Three-month zinc prices rose to 1,362 dollars per ton Friday from 1,353 dollars.
Three-month tin prices gained to 7,200 dollars per ton Friday from 7,175 dollars.
OIL: Oil prices struck an all-time high of 68.00 dollars per barrel in New York as Hurricane Katrina threatened oil rigs on the US Gulf Coast, while lower-than-expected US gasoline (petrol) stocks compounded supply worries.
New York’s main contract, light sweet crude for delivery in October, hit the record late Wednesday — the highest price since it was first traded in 1983.
London’s Brent crude meanwhile neared its historic record of 66.85 dollars set on August 14.
“The potential threat posed by Katrina is contributing to upward price momentum and possesses the potential to push crude oil above 70 dollars per barrel,” said Barclays Capital analyst Kevin Norrish.
Florida on Friday mopped up after a deadly bashing from Katrina, and braced for another hit as the weather system swirled over the Gulf of Mexico on a track that would take it back to the storm-weary state.
At least four people were killed late Thursday as the hurricane made landfall near Miami, southeastern Florida.
Elsewhere, Nigeria’s labour movement warned it would react quickly to protest the country’s latest fuel price hike on Friday — raising the prospect of a general strike in Africa’s biggest oil exporter as filling stations began raising prices.
Meanwhile, the US Department of Energy said that crude oil supplies increased 1.8 million barrels in the week to August 19 — well above market predictions of a 200,000-barrel rise.
But gasoline reserves dropped sharply by 3.2 million barrels, after a fall of five million barrels the previous week. The figure overshot analysts’ forecasts of a 900,00-barrel decrease.
By Friday, New York’s light sweet crude for October delivery surged to 67.50 dollars per barrel from 65.79 dollars the previous week.
In London, Brent North Sea crude for October delivery soared to 66.04 dollars per barrel from 63.30 dollars.
RUBBER: Rubber prices stretched on speculative buying.
“It’s been an unexpected rise in the market this week” thanks to speculators returning, said Rachid Ahmed, a trader at Corrie Maccoll. “Demand is still strong and supply is improving.”
On TOCOM, Tokyo’s commodity exchange, natural rubber for October delivery increased to 171.40 yen on Friday, from 161.30 yen a week earlier.
Singapore’s RSS 3 October contract rose to 154.75 US cents on Friday, from 147.75 cents.
COCOA: Cocoa firmed on rising tensions in Ivory Coast, the world’s top producer.
“The market was restrained from selling the market down by the uneasy and uncertain political situation in the Ivory Coast,” according to Ann Prendergast, analyst at the Refco brokerage.
Rebels in Ivory Coast withdrew their support for presidential elections being organised as part of a peace plan.
Ivory Coast has been split in two since a failed coup against President Laurent Gbagbo in September 2002, pitting rebels from the Muslim-dominated north against the Christian-populated south.
On LIFFE, London’s futures exchange, the price of cocoa for December delivery rose to 824 pounds per ton on Friday from 816 pounds a week earlier.
On the CSCE, the New York futures market, the December contract gained to 1,412 dollars per ton on Friday, from 1,387 dollars.
COFFEE: Coffee prices slumped to multi-month low points in New York and London.
Prices were “knocked down by bearish technical signals and pressed by fund and speculative selling”, Prendergast said.
Arabica coffee fell to 95.80 US cents per pound on Friday, the lowest level since January, while Robusta hit 946 dollars per ton, last seen mid-April.
On LIFFE, Robusta quality for November delivery sank to 954 dollars per ton on Friday from 1,004 dollars a week earlier.
On New York’s CSCE market, Arabica for December delivery dropped to 96.30 US cents per pound on Friday, from 100.50 cents.
SUGAR: Sugar prices steadied amid keen global demand.
“Strong physical demand and tightened supplies are underpinning London strength, but sentiment is bullish for the medium term,” Prendergast said.
By Friday on LIFFE, the price of a ton of white sugar for October delivery rose to 300.20 dollars from 287.50 dollars a week earlier.
On the CSCE in New York, a pound of unrefined sugar for October delivery stood at 9.75 US cents on Friday from 9.78 cents.
GRAINS AND SOYA: Grains and soya prices declined while favourable weather persisted in major producer United States.
On LIFFE, wheat for September delivery dipped to 67 pounds per ton on Friday from 67.20 pounds a week earlier.
In Chicago, the price of wheat for September delivery eased to 312.75 US cents per bushel Friday from 319.50 cents.
Maize for September delivery nudged down to 205.25 cents per bushel on Friday from 209.75 cents.
Soyabeans for September delivery declined to 591 cents per bushel on Friday from 599.50 cents.
September-dated soyabean meal — used in animal feed — stood at 184.50 dollars per ton from 187.50 dollars.
COTTON: Cotton prices bounced back on concerns that Hurricane Katrina might affect production in the south eastern United States.
“Katrina could have an impact on the southeast early next week and this may keep futures from breaking too much lower,” Prendergast said, adding that “not much damage is expected”.
New York’s December contract rose to 48.25 US cents per pound on Friday from 47.90 cents the previous week.
The Cotton Outlook Index of physical cotton stood at 53.20 cents on Thursday from 52.65 cents a week earlier.
WOOL: Wool prices firmed in Australia but held below the 7-dollar mark, near the lowest level for three and a half years.
“In a disappointing week for all sectors of the industry, the closing AE index drifted below 7 dollars for the first time since November 2001,” the Australian Wool Industries Secretariat said.
The Australian Eastern index rose to 6.98 Australian dollars per kilo on Thursday, from 6.81 dollars last Thursday — its lowest level since November 2001.
The British Wooltops index was unchanged at 412 pence from the previous week.—AFP
