April 01, 2007	Sunday	Rabi-ul-Awwal 12, 1428

LONDON, March 31: A crisis between major crude producer Iran and Britain, caused by Tehran's detention of 15 British sailors, caused oil prices to soar this week, while gold benefited from its safe-haven status.

OIL: World oil prices rocketed to near seven-month high points during the week-old standoff between London and Tehran over the Iranian detention of 15 British naval personnel.

In London on Friday, the price of Brent North Sea crude for May delivery reached $69.14 a barrel — the highest level since September 4 2006.

New York's main oil futures contract, light sweet crude for delivery in May, soared to $68.09 on Tuesday on rumours of military conflict with Iran.

Iran is the world's fourth biggest producer of crude oil and some analysts believe there is a risk that the Islamic Republic could disrupt its exports should the crisis with Britain escalate.

The overriding factor ... is still the Iranian situation, Daiwa Securities analyst Mark Pervan said.

It's a lot of 'just in case' buying at this stage. Prices began surging after Britain froze ties with Iran after it refused to release 15 British sailors and marines it had captured on March 23. Iran insists that the personnel were detained for being in Iranian waters but Britain maintains they were inside Iraqi waters.

Further fuel was added to oil prices since Thursday when Iran decided against releasing the only female British sailor held among the 15.

Oil prices are being supported also by Iran's refusal to bow to international pressure stemming from its disputed nuclear programme.

Despite the week's spike to crude -- prices have shot up more than nine per cent since last Friday -- they remain a long way off record highs of above 78 dollars a barrel struck last year.

By Friday in London, a barrel of Brent North Sea crude for delivery in May rocketed to 68.64 dollars a barrel, from 63.02 dollars the previous week.

In New York, a barrel of crude for delivery in May jumped to $66.45 a barrel from $62.15.

GOLD: The price of gold rose to as high as $669.69 an ounce -- the highest point since March 1.

Traders were again left wondering what it will take to push gold above $670 dollars, said James Moore, an analyst for BullionDesk.com.

The precious metal is benefiting from higher oil prices, which fuel inflation. That increases the attractiveness of gold as a defence against the erosion of money's value.

On the London Bullion Market, gold prices rose to $661.75 per ounce at Friday's late fixing, from $656.20 the previous Friday.

SILVER: Silver prices dipped, failing to gain from gold's rise.

Further resistance is expected around $13.45-50 (an ounce), Moore said.

On the London Bullion Market, silver prices stood at $13.35 an ounce at Friday's late fixing, from $13.37 the previous week.

PALLADIUM AND PLATINUM: Platinum struck a one-month high, while sister metal palladium fell.

Platinum was bought on a perception that it would out-perform if the whole (precious metals) complex rallied but ran into long liquidation at the highs, UBS analyst John Reade said.

On the London Platinum and Palladium Market, platinum rose to 1,244 dollars an ounce at the late fixing Friday, from 1,232 the previous week.

Palladium dropped $351.75 per ounce, from $354 one week earlier.

BASE METALS: Base metals prices mostly rose. Tin which struck a 25-year high but ended the week lower after heavy profit-taking.

Metals generally are still very tight and even where surplus is likely to develop this is not really in evidence yet, Societe Generale analyst Stephen Briggs said.

Confidence has returned, although many investors do now seem to be selective. The price of tin hit 14,600 dollars a ton, the highest point since 1989 when the metal was re-introduced on the London market.

Tin futures are surging on supply concerns from Indonesia, where a government crackdown on illegal mining has slashed production levels, and because of low inventories of the base metal.

On Friday, three-month copper prices jumped to $6,859.50 a ton on the LME, from $6,790.50 the previous week.

Three-month aluminium prices climbed to $2,803 a ton from $2,770.

Three-month nickel prices fell to $43,795 a ton from 44,495 dollars.

Three-month lead prices stood at $1,925 a ton from $1,926.

Three-month zinc prices rose to $3,285 a ton from $3,226.

Three-month tin prices dropped to $13,650 a ton from $14,350 a week earlier.

GRAINS AND SOYA: Grains prices tumbled in Chicago after a US goverment report said American farmers would plant their highest levels of corn since 1944.

The US Department of Agriculture on Friday said that land devoted to corn planting will increase 15 per cent this year to 36.6 million hectares (90 million acres) amid surging demand for ethanol fuels to replace petroleum.

The move to corn, a key crop for ethanol used for gasoline blends, comes amid a decline of 11 per cent in acreage devoted to soyabeans.

On the Chicago Board of Trade, the price of wheat for May delivery dropped to $4.4050 a bushel on Friday, from $4.6150 the previous week.

Maize for May delivery slid to $3.7450 a bushel on Friday, from $4.0325 the previous week.

May-dated soyabean meal -- used in animal feed -- gained to $7.7050 on Friday, from $7.6950 the previous week.

On the LIFFE, London's futures exchange, the price per ton of wheat for May delivery rose to 95.50 pounds on Friday, compared with 89.50 pounds for wheat for November the previous week.

The November contract had been the most traded contract the previous week.

COCOA: Cocoa prices struck the highest levels since 2003 on drought fears in main producer Ivory Coast.

New York futures hit $1,966 a ton, last reached in May 2003. In London, prices rose to 1,056 pounds a ton, not seen since September 2003.

The market has been driven by the fears of the drought from the Ivory Coast, Standard Chartered analyst Abah Ofon said.

The market has really concentrated on demand and supply. There is a little bit of worry that supply is going to decrease, he added.

By Friday on the LIFFE, the price of cocoa for May delivery jumped to 1,056 pounds a ton, from £1,039 a week earlier.

On the New York Board of Trade (NYBOT), the May contract advanced to 1,951 dollars a ton, from $1,907 the previous week.

SUGAR: Sugar prices slipped to a 19-month low of 9.90 cents a pound in New York.

Market sentiment remains bearish with the prospect of abundant supplies this season, Sucden analyst Michael Davies said.

By Friday on the LIFFE, the price per ton of white sugar for August delivery fell to $317, compared with $329 a week earlier.

On the NYBOT, the price of unrefined sugar for July delivery declined to 9.92 US cents a pound, from 10.21 cents the previous week.

COFFEE: Coffee prices fell, hit by rising European stockpiles of the commodity amid expectations of robust production.

By Friday on the LIFFE, Robusta quality for May delivery slid to 1,513 a ton, from $1,567 a week earlier.

On the NYBOT, Arabica for May delivery dropped to 109.15 US cents per pound on Friday, from 113.45 cents the previous week.

RUBBER: Malaysian rubber prices fell slightly.

Intracom rubber broker Robert Chai said the market was quiet with buyers from China staying away owing to Malaysia's higher prices.

Buyers are not in the market because rubber prices are higher than in Thailand and Indonesia, he said.

Chai added that he expected a rebound in the market during coming weeks with Chinese factories looking to build their stockpiles.

The Malaysian Rubber Board's benchmark SMR20 dipped to 214.50 cents a kilogramme on Friday, from 214.60 cents the previous week.

WOOL: Wool prices fell in leading producer Australia.

Although prices eased during the week, this occurred against the impact of the drought showing up in the offering, a larger than expected sale quantity and a continuing high exchange rate, the Australian Wool Industry Secretariat said.

Compared to the start of the upward movement of the market in October, the Eastern index is up by 25.9 per cent, it added.

The Australian wool market finished 1.3 per cent lower on average this week, with the Eastern index falling to 9.33 Australian dollars a kilo, from $9.43 the previous week.-—AFP