February 19, 2006	Sunday	Muharram 20, 1427

LONDON, Feb 18: World oil prices dived below $60 this week, as a jump in stockpiles of US crude inventories offset concerns about possible supply disruptions in major exporter Iran.

Metals fell across the board on profit-taking after recently striking historic and multi-year high points.

The Commodities Research Bureau’s index of 17 commodities dropped to 323.33 points on Friday, from 336.58 points the previous week.

GOLD: Gold prices extended losses as geopolitical concerns receded.

Oil prices have continued their recent downtrend, which opens up potential for more correction in gold, Barclays Capital analyst Yingxi Yu said.

James Moore, an analyst for the specialist website TheBullionDesk.com said gold was set for further volatile trading in the near future.

Gold prices had hit $575.35 per ounce in London trading on February 2, the highest level since January 1981, on the back of rising geopolitical concerns, particularly over Iran’s nuclear activities, which have since eased.

On the London Bullion Market, gold prices fell to $551.70 per ounce at Friday’s late fixing from $557 the previous week.

SILVER: Silver prices mirrored losses by sister metal gold.

Silver was also hit by selling interest, in line with gold, but appears to be relatively well supported above $9.00, Yu said.

Silver had struck 9.935 dollars per ounce on February 2, the highest point since March 1984.

On the London Bullion Market, silver prices dropped to 9.46 dollars per ounce at Friday’s fixing, from $9.55 the previous week.

PALLADIUM AND PLATINUM: Platinum and palladium prices fell even though Chinese buyers entered the market.

Despite evidence of Chinese physical demand in platinum and palladium both metals didn’t really bounce, said UBS analyst John Reade.

Platinum, used in jewellery and catalytic converters for automobiles, had reached a historic peak of 1,085.50 dollars on February 3 in the wake of gains by other precious metals.

On the London Platinum and Palladium Market, an ounce of platinum fell to 1,012 dollars per ounce at the late fixing on Friday, from $1,066 the previous week.

Palladium slid to 283 dollars per ounce on Friday, from $298.

BASE METALS: Base metals prices tumbled on profit-taking after striking record heights the previous week.

The latest wave of selling in the metals markets was driven by long liquidation by the funds, Barclays Capital analyst Ingrid Sternby said.

Reade of UBS said that a sell-off in aluminium had unsettled the rest of the base metals complex.

Aluminium had hit a 17-year high on February 6, the same day that copper and zinc struck record peaks.

That day, copper prices had hit 5,075 dollars per ton — the highest level since the commodity was first listed in its current format in 1870.

The same day zinc hit a historic peak of 2,420 dollars and aluminium posted a 17-year high of $2,670.10.

On Friday, three-month copper prices on the London Metal Exchange dropped to 4,885 dollars per ton from $,973 the previous week.

Three-month aluminium prices dollars fell to $,319 per ton from $,598.

Three-month nickel prices weakened to $5,100 per ton from 45,305.

Tree-month lead prices decreased to $,215 per ton from 4,269.

Three-month zinc prices slipped to $,053 per ton from $,308.

Three-month tin prices slid to $,725 per ton from $,775.

OIL: World oil prices plunged below $0 per barrel on easing supply concerns with US energy stockpiles deemed sufficient to meet demand going forward.

Prices rebounded slightly towards the end of the week, as concerns over Iran resurfaced.

In New York, prices had closed almost two dollars lower on Wednesday to 57.65 dollars per barrel, the weakest finish since December 19, after the US Department of Energy said that crude oil reserves had risen by 4.9 million barrels to 325.6 million in the week to February 10.

The stockpiles’ gain was well above the rise of 1.1 million barrels forecast by private economists.

Gasoline inventories meanwhile increased 2.2 million barrels to 225.5 million, also ahead of the average analyst forecast of a rise of 1.4 million barrels.

Reserves of distillates, used for heating and diesel fuel, rose 900,000 barrels to 136.9 million, according to the DoE.

Jason Schenker at Wachovia Securities said the report showing supply increases in all categories was “fundamentally bearish for prices on the supply side of the equation”.

US crude stocks are now about 11 per cent higher than at the same stage last year, while gasoline and distillates stockpiles are up 1.8 per cent and 14 per cent respectively.

“Geopolitical issues are still providing some support to the market,” analysts at the Sucden brokerage firm added.

The unfolding crisis over Iran’s nuclear ambitions has led to concerns of possible disruptions to the country’s oil exports of 2.6 million barrels of crude per day.

Iran insisted Thursday that it was not seeking a nuclear weapon, rejecting accusations by France that its atomic drive was “clandestine” and “military” in nature.

In London, a barrel of Brent North Sea crude for delivery in April dived to 59.91 dollars per barrel on Friday, from 61.06 dollars the previous week.

In New York, a barrel of crude for delivery in March tumbled to 59.40 dollars per barrel Friday from 62.97 dollars.

RUBBER: Rubber prices lost ground on profit-taking.

Speculators and fund managers have used this week to take profits, said Corrie Maccoll analyst Rashid Ahmed.

Tokyo rubber prices had hit the highest level for more than 20 years at the start of February, at 264 yen per kilo.

On TOCOM, Tokyo’s commodity exchange, natural rubber for April delivery dropped to 238.70 yen on Friday, from 255.90 yen from the previous week.

Singapore’s RSS 3 April contract declined to 198.75 US cents on Friday, from 210.50 cents the previous week.

COCOA: Cocoa prices dropped to the lowest levels in two weeks.

Cocoa futures slipped... as the funds continued to sell on plentiful world bean supplies, Sucden analysts said.

They added, however, that the flow of cocoa beans has been slowing in the last months of the Ivorian October-March main crop.

The west African nation of Ivory Coast produces between 30-40 per cent of global cocoa supplies.

On the LIFFE, London’s futures exchange, the price of cocoa for May delivery sank to 900 pounds on Friday, from 931 pounds a week earlier.

On the New York Board of Trade (NYBoT), the May contract slid to 1,494 dollars per ton on Friday, from 1,530 dollars.

COFFEE: Coffee prices deepened losses in New York and London.

Coffee futures in London slid “on speculative and trade selling with weakness in the overall commodity sector partly influencing the move”, Sucden analysts said.

The price of Robusta coffee in London has shed 11.0 per cent of its value since striking a seven-month high point at the end of January.

On LIFFE, Robusta quality for May delivery eased to 1,213 dollars per ton on Friday, from 1,234 dollars a week earlier.

On NYBoT, Arabica for May delivery fell to 111.30 US cents per pound on Friday, from 118.20 cents.

SUGAR: Sugar prices soured.

Part of the reason for the recent decline in prices is the recent drop in crude oil and gasoline prices... as the lower gasoline prices remove some of the urgency to increase the output of ethanol and reduce the demand, Sucden analysts said.

Sugar cane is used to produce ethanol, a cheaper alternative to gasoline or petrol.

By Friday on LIFFE, the price of a ton of white sugar for May delivery dropped to 439.50 dollars, from 444.50 dollars the previous week.

On NYBot, the price of unrefined sugar for May delivery slipped to 17.76 US cents per pound on Friday, from 17.85 cents.

GRAINS AND SOYA: Grains and soya prices mostly edged higher.

Weather in major producing countries in South America remained a constant concern, according to Allendale analyst Scott Laudick.

In Argentina, dry growing conditions — deemed harmful to harvests — continued to support higher soya prices but forecasters predicted rainy weather next week.

On the LIFFE, the price of a ton of wheat for May delivery decreased to 73.10 pounds late Friday, from 74 pounds a week earlier.

On the Chicago Board of Trade, the price of wheat for March delivery rose to 3.62 US dollars per bushel on Friday, from 3.595 dollars.

Maize for March delivery firmed to 2.25 dollars per bushel Friday, from 2.24 dollars.

March-dated soyabean meal — used in animal feed — stood at 6.00 dollars per ton, from 5.82 dollars.

COTTON: Cotton prices unwound, despite better-than-expected US export data that pointed towards stable demand.

Rainy weather — favourable to crop growth — in major producers Australia, Argentina, India and Pakistan encouraged selling, which sent prices lower, dealers said.

On the New York Cotton Exchange (NYCE), the March contract dropped to 57.00 US cents per pound on Friday, from 57.38 US cents one week earlier.

The Cotton Outlook Index of physical cotton stood at 61.55 US cents on Thursday, from 60.90 cents the previous week.

WOOL: Wool prices reached a fresh seven-month high point in major producer Australia, partly because of rebounding Chinese demand.

Prices reached 7.32 Australian dollars per kilogramme this week for the first time since July 2005. In contrast, prices had last December fallen to 6.32 Australian dollars, the lowest point in almost six years.

“Buyers for China were dominant” this week, the Australian Wool Industries Secretariat said.

The Australian Eastern index rose to 7.32 Australian dollars per kilo on Thursday, from 7.29 Australian dollars the previous week.

The British Wooltops index stood at 421 pence on Thursday, compared with 414 pence the previous week.—AFP