June 17, 2007	Sunday	Jumadi-us-Sani 01, 1428

LONDON, June 16: The price of crude oil on world markets raced higher this week, with London Brent crude breaching $71 a barrel on gasoline (petrol) supply concerns in the United States.

Wheat struck an 11-year high in Chicago owing to drought conditions in Ukraine and Russia.

The coffee market was rocked by production woes in key exporter Vietnam, where supplies are struggling to keep up with demand, sending London coffee futures to the highest level since 1998.

On the downside gold and silver were hurt by a stronger dollar, while the price of nickel slumped further.

GOLD: The price of gold fell to the lowest level since March as a strengthening dollar made the precious metal more expensive for buyers holding weaker currencies.

On the London Bullion Market, gold prices dropped to $643.38 an ounce -- the lowest point since March 14. The price later recovered, however.

The dollar has gained on expectations that the US Federal Reserve could soon increase American borrowing costs.

Given expectations for higher interest rates to stem inflation concerns it seems gold and the other precious metals will remain under pressure, said James Moore of the specialist website TheBullionDesk.com.

On the London Bullion Market, gold dropped to $653.10 an ounce at Friday's late fixing, from $655.25 a week earlier.

SILVER: Silver prices mirrored the performance of gold.

It fell to a near one-month low of $12.83 an ounce, before rebounding above $13 helped by some strong performances from base metals.

Silver is both a precious and industrial metal, used to make jewellery and by the photographic and dentistry sectors.

Strong sentiment in the base metals should continue to lend support to silver, Moore said.

On the London Bullion Market, silver slipped to $13.06 an ounce at Friday's late fixing, from $13.31 a week earlier.

PALLADIUM AND PLATINUM: The sister metals extended losses, but the falls were limited by ongoing wage negotiations between bosses and staff in South Africa.

Anglo Platinum, the world's biggest platinum producer, offered its workers a seven percent wage increase but this failed to appease union leaders.

The large gap between what the unions are demanding and what is being offered suggests the negotiations will drag on, providing additional support, to prices, Moore said.

On the London Platinum and Palladium Market, platinum retreated to $1,278 an ounce at the late fixing Friday, from $1,288 a week earlier.

Palladium eased to $367 an ounce, from $369.

BASE METALS: Most base metal prices increased.

Lead rebounded, reaching $2,350 a ton, which was close to its all-time peak of $2,380. Lead profited from low stockpiles of the metal amid strong demand.

On the downside nickel, which is used to prevent corrosion, dropped to $38,900 a ton -- the lowest point since February 22. The metal has shed 25 per cent of its price since striking a record high of $51,800 a ton on May 9.

We anticipate prices to fall further as the market digests a combination of slowing stainless steel activity in the US and Europe, and rising Chinese output of low-nickel pig iron spurred by its spiralling nickel ore imports, Barclays Capital analysts said.

On Friday, the price of copper for delivery in three months rallied to $7,381 a ton on the London Metal Exchange, from $7,202 a week earlier.Three-month aluminium prices nudged higher to $2,716 a ton, from $2,709.

Three-month nickel prices slumped to $40,900 a ton, from $42,600.

Three-month lead prices increased to $2,353 a ton, from $2,257.

Three-month zinc prices advanced to $3,685 a ton, from $3,600.

Three-month tin prices jumped to $14,100 a ton, from $13,705.

OIL: World oil prices leapt above $71 in London as traders seized on news of tightening motor fuel supplies in the United States, but gains were tempered by light profit-taking ahead of the weekend.Gasoline or petrol stockpiles are presently a major influence on the market because of the ongoing US driving season, when demand traditionally peaks as American holidaymakers hit the highways.

Prices began in positive territory after a heavy sell-off the previous week, which was partly sparked by fears that rising global interest rates could crimp global economic growth -- and energy demand.

Crude futures reversed direction on Tuesday as the market turned its focus to the weekly US stockpiles data.

Expectations that gasoline supplies had risen strongly last week led traders to shrug off a forecast of higher crude demand by the International Energy Agency.

However, prices surged higher on Wednesday after the US Department of Energy revealed that American gasoline inventories were, in fact, unchanged at 201.5 million barrels in the week ending June 8, ending a five-week streak of gains.

Crude prices were also supported by a decline in refinery utilisation for the second consecutive week.

Elsewhere in the market, the Organization of Petroleum Exporting Countries held steady its estimate of world demand for oil this year in a monthly report.

The producers' grouping also brushed aside calls from consuming countries that it boost supply in a bid to lower prices.

Geopolitical jitters have also lent support to oil prices amid unrest in the crude-rich Middle East, and lingering concerns over Iran's disputed nuclear energy ambitions.

Brent North Sea crude for August delivery surged to $71.84 a barrel on Friday, from $69.78 a barrel a week earlier.

New York's main oil futures contract, light sweet crude for delivery in July, advanced to $67.70 a barrel, from $65.08 a barrel.

GRAINS AND SOYA: Grains and soya prices rallied, with wheat striking $6.07 a bushel in Chicago -- the highest level since 1996.

Ukraine and Russia are still experiencing dry weather problems, Allendale analyst Joe Victor said.

By Friday on the Chicago Board of Trade, the price of maize for July delivery jumped to $4.18 a bushel, from $3.82 a week earlier.

Wheat for July delivery soared to $6.07 a bushel, from $5.27.

July-dated soyabean meal -- used in animal feed -- increased to $8.43, from $8.21.

On the LIFFE, London's futures exchange, the price per ton of wheat for November delivery gained to 112.75 pounds, from 106 pounds.

COFFEE: Coffee prices hit the highest level for nine years in London, lifted by concerns over insufficient supplies from Vietnam. They later fell on profit-taking.

On the LIFFE, London's futures exchange, Robusta prices leapt to $1,940 a ton -- a pinnacle not reached since 1998.

The price of Robusta coffee has almost tripled in value since November 2004.

Coffee prices in London have rocketed as investors fret over lower exports from Vietnam, which is the world's second biggest coffee producer.

High-caffeine Robusta, a bitter variety used in instant coffee, and the more expensive Arabica are the two most widely traded types of coffee.

By Friday on the LIFFE, Robusta quality for July delivery slid to $1,853 a ton, from $1,874 a week earlier.

On the NYBOT, Arabica for July delivery gained to 115.40 US cents a pound, from 114.85 cents.

COCOA: Cocoa prices rebounded in London and New York owing to industry and fund buying.

London cocoa futures were sharply higher, surging by approximately 4.0 per cent on Thursday, Sucden analyst Michael Davies said.

By Friday on the LIFFE, the price of cocoa for September delivery rose to 1,077 pounds a ton, compared to 1,015 pounds a week earlier when the most traded contract was for the month of July.

SUGAR: Sugar prices extended losses, briefly sliding under $300 a ton in London for the first time since April.

Prices are being weighed down by an abundance of sugar in the market, according to traders.

By Friday on the LIFFE, the price per ton of white sugar for August delivery dropped to $305.60, from $311.50 a week earlier.

On the NYBOT, the price of unrefined sugar for July delivery slipped to 8.53 US cents a pound, from 8.74 cents.

WOOL: The price of wool in major producer Australia finished lower, as the commodity gave up more of the post-Easter gains which saw it hit a four-year high last month.

Although easing again, the market remains above where it was four weeks ago in Australian, US and Euro currency, said the Australian Wool Industry Secretariat.

The Australian wool market finished 1.8 per cent lower on average from a week earlier, with the Eastern Index ending at 9.85 Australian dollars a kilogramme.—AFP