October 29, 2006	Sunday	Shawwal 5, 1427

LONDON, Oct 28: The price of crude oil edged upwards this week as confidence grew in the ability of the Opec cartel to cut production in order to stem recent heavy losses.

The best-performing metals were zinc and lead, which enjoyed fresh historic highs, while agricultural commodities traded higher as well.

On Friday, the Commodities Research Bureau's index of 17 commodities rose to 311.46 points, from 306.11 points the previous week.

GOLD: Gold prices ended the week on a stable note, after holding in positive territory for much of the week as traders reacted to crude oil prices and movements in the US dollar.

The combination of firmer oil/weaker dollar and the reiteration of inflation risk in the Fed's statement (had) given gold a lift, said James Moore, an analyst for specialist website TheBullionDesk.com.

The US Federal Reserve on Wednesday kept its borrowing costs at 5.25 per cent for the third meeting running, arguing that falling energy prices should bring down elevated inflation.

Investors seek refuge in gold because it is seen as a safe store of value in times of higher inflation. A weaker dollar makes commodities priced in the US unit on world markets more attractive to buyers using other currencies.

On the London Bullion Market, gold prices eased to 596.25 dollars per ounce at Friday's late fixing, from 596.40 dollars one week earlier.

SILVER: Silver prices climbed to a seven-week peak.

Silver on Thursday reached 12.26 dollars -- the highest level since September 8 -- as crude oil and gold prices rose during the week.

On the London Bullion Market, silver prices rose to 12.05 dollars per ounce at Friday's fixing, from 11.98 dollars the previous week.

PALLADIUM AND PLATINUM: Platinum and palladium prices eased despite the presence of industrial buyers.

The emergence of industrial interest at current levels is encouraging and will go someway to offset the recent speculative liquidation, said Moore.

On the London Platinum and Palladium Market, platinum fell to 1,072 dollars per ounce at the late fixing Friday, from 1,080 dollars the previous week.

Palladium slid to 319 dollars per ounce on Friday from 326 dollars the previous week.

BASE METALS: Zinc and lead prices hit new records owing to keen Chinese demand and low global stocks, while copper and nickel fell slightly as stocks rose.

Zinc hit a peak on Friday of 4,185 dollars per tonne -- the highest level since the metal was first listed in 1915. Zinc is used to galvanize iron and steel.

Meanwhile, lead reached 1,630 dollars, the highest reading since the metal began trading in London in 1953.

Zinc squeezed out another new peak, which was sufficient to underpin sister metal lead, said UBS analyst Robin Bhar.

Copper and nickel were both pressured by a further rise in LME stocks. On Friday, three-month copper prices stood at 7,520 dollars per tonne on the London Metal Exchange from 7,665 dollars the previous week.

Three-month aluminium prices rose to 2,830 dollars per tonne from 2,739 dollars.

Three-month nickel prices fell to 31,200 dollars per tonne from 32,000 dollars.

Three-month lead prices increased to 1,620 dollars per tonne from 1,499 dollars.

Three-month zinc prices climbed to 4,170.50 dollars per tonne from 3,995 dollars.

Three-month tin prices stood at 10,250 dollars per tonne, up from 9,950 dollars a week earlier.

OIL: Crude futures clawed back ground as traders seized on news that energy stockpiles in the United States fell across the board, while the market was reassured over Opec's announced output cut.

The Organization of the Petroleum Exporting Countries cartel promised on October 20 to cut output by 1.2 million barrels a day as prices hovered about 25 per cent lower than record highs above 78 dollars set in July and August.

Analysts had been sceptical at first over the implementation and timing of the cuts, helping push prices lower the previous week.

With supplies tightening, participants' confidence in Opec growing and colder (US) weather raising heating demand during the current refinery maintenance period, the supertanker that represents market perception is beginning to turn, said Fimat analyst Mike Fitzpatrick.

World oil prices had soared on Wednesday, with Brent crude back above 62 dollars a barrel, after official data showed that US energy stockpiles fell across the board last week.

The US Department of Energy said crude reserves unexpectedly declined 3.3 million barrels to 332.3 million in the week to October 20, compared with market forecasts of an increase by a similar amount.

That was the strongest weekly fall since July and came as cold temperatures took grip in the northeast United States.

Levels of distillate products, such as heating oil and diesel fuel, were down 1.4 million barrels to 144.0 million.

Towards the end of the week, crude futures dipped on profit-taking, and as worries over output eased in major oil producers Norway and Nigeria.

At about 1630 GMT on Friday in New York, a barrel of crude for delivery in December rose to 60.20 dollars per barrel from 59.90 dollars the previous week.

In London, a barrel of Brent North Sea crude for delivery in December gained to 60.66 dollars per barrel, from 60.35 dollars.

RUBBER: Rubber prices headed lower amid unseasonally dry weather in major producing Asian nations.

The so-called rainy season, which began in October and draws to a close in late November, makes it harder for farmers to collect latex.

However, Indonesia and Thailand experienced dry weather conditions this week.

On TOCOM, Tokyo's commodity exchange, natural rubber for March delivery slid to 223 yen per kilogramme on Friday, from 233.50 yen a week earlier.

Singapore's RSS 3 March contract declined to 185.50 US cents per kilogramme on Friday, from 192.25 US cents a week earlier.

COCOA: Cocoa prices advanced as traders monitored raised tensions in leading exporter Ivory Coast.

The market concentrated on the political developments in Ivory Coast, where uncertainty remains after another failed election and UN's draft resolution to extend the existing prime minister's term for another year, pending elections, said Sucden's Davies.

This uncertainty haunts the market and deters traders from rushing into large selling. Ivory Coast has been split into two since a September 2002 when a coup attempt led by New Forces rebels failed to depose Ivorian President Laurent Gbagbo. The rebels have since then controlled half of the world's top cocoa producer.

On the LIFFE, London's futures exchange, the price of cocoa for December delivery rose to 830 pounds per tonne on Friday, from 816 pounds a week earlier.

On the New York Board of Trade (NYBOT), the December contract stood at 1,472 dollars per tonne on Friday, from 1,428 dollars a week earlier.

COFFEE: Coffee prices rebounded slightly as speculators returned to the market, but gains were capped by weather prospects.

The market remains under pressure from favourable weather conditions in Brazil for the flowering of the trees, Davies said.

On LIFFE, Robusta quality for January delivery stood at 1,517 dollars per tonne on Friday, from 1,483 dollars a week earlier.

On NYBOT, Arabica for December delivery edged up to 107.50 US cents per pound on Friday, from 101.85 cents.

SUGAR: Sugar prices firmed on speculative buying but gains were capped by an expected production surplus.

The market, technically speaking, is probably due a move higher, but the weight of an expected supply glut in 2006/07 has limited any gains, said Davies.

By Friday on LIFFE, the price of a tonne of white sugar for March delivery changed hands at 366.50 dollars, compared with 358.10 dollars a week earlier.

On NYBOT, the price of unrefined sugar for March delivery stood at 11.90 US cents per pound, from 11.53 US cents the previous week.

GRAINS AND SOYA: Prices of soya and grain mostly firmed, with wheat trading close to recent peaks amid a drought which has plagued key exporter Australia.

Corn and wheat have led the way higher this week, the world stocks remain very thin and the demand is big, said Allenale analyst Joe Victor.

The current drought gripping Australia has slashed wheat output and helped drive wheat prices to recent multi-year peaks in Chicago, Paris and London markets.

Global grain demand would outstrip supply in 2006-2007 and would create a production deficit of some 64 million tons, the International Grains Council forecast Thursday.

Worldwide grain output, meanwhile, was estimated to reach 1.557 billion tons in the year, compared the previous forecast of 1.572 billion tons.

On the Chicago Board of Trade, the price of wheat for December delivery decreased to 5.06 US dollars per bushel on Friday, from 5.08 dollars a week earlier.

Maize for December delivery gained to 3.29 dollars per bushel on Friday, from 3.14 dollars.

November-dated soyabean meal -- used in animal feed -- advanced to 6.31 dollars, from 6.07 dollars the previous week.

On the LIFFE, the price of a tonne of wheat for November delivery rose to 97.00 pounds on Friday, from 95.25 pounds.

COTTON: Cotton prices rose higher on expectations that China would import even more of the commodity in 2006/2007 to fuel its burgeoning textiles industry.

On the NYBOT, the December contract rose to 50.40 US cents per pound on Friday, from 48.70 US cents a week earlier.

The Cotton Outlook Index of physical cotton climbed to 57.50 US cents on Thursday, from 56.20 cents the previous week.

WOOL: Wool prices rose in major producer Australia on continued demand in Euope and Asia.

The demand was again widespread, with a strong presence from buyers for Europe and Taiwan and the topmakers adding to the Chinese buyers, said the Australian Wool Industries Secretariat.

The Eastern index rose to 7.82 Australian dollars per kilo on Thursday, from 7.55 the previous week.

The British Wooltops index was stood at 391 pence on Thursday, unchanged from the previous Thursday.—AFP