July 22, 2007	Sunday	Rajab 06, 1428

LONDON, July 21: World oil prices soared close to record heights this week, energised by concerns over tight global supplies and keen demand led by the United States and China.

Base metals tin and lead hammered record high points, while gold struck a two-month peak.

Many commodities won support from the falling US currency, which increases demand for dollar-denominated commodities because they become cheaper for buyers holding stronger-performing currencies.

Prices were underscored by impressive economic growth data from China, which is one of the world’s biggest markets for raw materials.

China said its economy expanded by a blistering 11.9 per cent in the second quarter and 11.5 per cent for the first six months of 2007. But that prompted China’s central bank to raise interest rates for the third time this year.

OIL: The price of New York crude struck a fresh 11-month high point above $76 a barrel, owing to tight US supplies, while London’s Brent oil traded close to its historic high.

Brent North Sea crude for August struck $78.40 a barrel on Monday, close to Brent’s all-time high of 78.64.New York’s main oil futures contract, light sweet crude for delivery in August, surged to $76.13 per barrel on Friday — the highest level since August 2006. New York’s all-time high stands at $78.40.

Analysts said prices are expected to remain supported by tight supplies.

There are a lot of speculators in the market now, noted Nas Nijjar, a trader at CMC Markets.

People were looking for a push above $78 (for Brent), and now they are going to look for $78.65. Oil prices strengthened further this week as official data revealed an unexpected dive in stockpiles of US gasoline.

US motor fuel inventories fell by 2.3 million barrels in the week ended July 13, to 203.3 million barrels, leaving them 4.5 per cent below their year-earlier levels, the US Department of Energy (DoE) said Wednesday.

Last week’s drop in gasoline inventories compared with analyst forecasts for a rise of 700,000 barrels.

It came as gasoline consumption last week neared 9.71 million barrels per day, its second-highest level on record.

Gasoline stockpiles have been a focus for the market because of current high demand for motor fuel as Americans take to the roads for their summer holidays.

Prices had rallied on Thursday also after French energy giant Total said a problem with a generator at its 220,000 barrel-per-day Dalia oilfield in Angola had shut in around 50 per cent of output at the field.

Oil prices have risen strongly since last week when the International Energy Agency raised its 2008 forecast for oil demand by 2.5 per cent to 88.2 million barrels a day.

The IEA has called for the Opec producers’ cartel to pump more crude, notably during the ongoing driving season.However, the Organization of the Petroleum Exporting Countries has repeatedly insisted that it does not plan to raise output.

Leading Opec member Iran said Tuesday there was no need for an emergency meeting of the cartel to discuss high oil prices, saying the market was already well-supplied with crude.

By Friday, Brent North Sea crude for September delivery gained to $77.63 a barrel on Friday, compared with $77.57 a barrel for the August contract a week earlier.

New York’s main oil futures contract, light sweet crude for delivery in August, jumped to $75.79 a barrel, from $73.93 a barrel.

GOLD: The price of gold jumped on Thursday to the highest level since May owing to a sliding US dollar and surging oil prices, analysts said.

On Friday, gold prices rose to $683.90 per ounce, which was the highest point for more than two months.

External factors such as the dollar and oil prices are likely to remain key drivers of market sentiment and gold prices during the seasonally slow demand period, said analysts at Barclays Capital.

On Friday, the euro hit an all-time high above $1.384 as the US currency was weighed down by the prospect of higher interest rates in Europe.

Gold is also buoyed by higher crude prices, because they increase the risk of inflation — which in turn increases the attractiveness of the precious metal as a defence against the erosion of the value of money.

On the London Bullion Market, gold jumped to $681.60 an ounce at Friday’s late fixing, from $666.50 a week earlier.

SILVER: Silver prices rose in the wake of sister metal gold.

On the London Bullion Market, silver increased to $13.29 an ounce at Friday’s late fixing, from $13.13 a week earlier.

PALLADIUM AND PLATINUM: Platinum hit a two-month high of $1.337, lifted by the threat of a strike in producer South Africa and boosted by the weak US dollar. Palladium prices also firmed.

On the London Platinum and Palladium Market, platinum rose to $1,332 an ounce at the late fixing Friday, from $1,313 a week earlier.

Palladium stood at $370.50 an ounce, from $368.

BASE METALS: The prices of lead and tin hit historic peaks, and other base metals also jumped higher as the complex was boosted by tight global supplies, soaring Chinese economic growth and fierce demand, analysts said.

Fund interest focused on the smaller contracts such as tin and lead, which traded at new highs on fresh buying, said UBS analyst Robin Bhar.

The price of lead reached $3,440 a ton — the highest reading since the metal began trading in London in 1953.Lead has hit a series of all-time highs this year, benefiting from supply shortages and soaring demand, particularly from powerhouse economy China.

Meanwhile, the price of tin hit $15,700 a ton — which was the highest point since 1989 when the metal was re-introduced on the London market.

Global tin supplies remain tight, as Indonesia, the world’s second largest producer after China, continues its crackdown on illegal tin mining and smelting that has cut output in the country for much of this year.

Meanwhile, production in Bolivia, which last year accounted for around 5.0 per cent of world tin output, has also been hit by strike action this year.

On Friday, the price of copper for delivery in three months increased to $8,065 a ton on the London Metal Exchange, from $7,780 a week earlier.

Three-month aluminium prices rose to $2,855 a ton, from $2,798.

Three-month nickel prices gained to $34,487 a ton, from $32,700.

Three-month lead prices rocketed to $3,440 a ton, from $3,000.

Three-month zinc prices jumped to $3,651 a ton, from $3,550.

Three-month tin prices leapt to $15,500 a ton, from $14,175.

COCOA: Cocoa prices won ground in London and New York.

New York benchmark cocoa was slightly higher, with support from the stronger pound against the dollar, said Sucden analyst Michael Davies.

By Friday on the LIFFE, London’s futures exchange, the price of cocoa for September delivery firmed to 1,109 pounds a ton, from 1,102 pounds a week earlier.

On the New York Board of Trade (NYBOT), the September contract rose to $2,103 a ton, from $2,075 the previous Friday.

COFFEE: Coffee prices rebounded from losses the previous week.

London coffee prices are approaching nine-year highs, lifted by worries over low exports from Vietnam, which is the second-biggest global producer after Brazil.

By Friday on the LIFFE, Robusta quality for September delivery advanced to $1,879 a ton, from $1,805 a ton one week earlier.

On the NYBOT, Arabica for September delivery rose to 114.50 US cents a pound, from 109.85 cents.

GRAINS AND SOYA: Maize and soya prices fell as favourable growing conditions boosted supplies, while wheat prices advanced on strong demand.

Bad week for corn and soya bean... primarily because of the advantageous weather, said Allendale analyst Joe Victor.

He added: “The positive news for the wheat market this week is the fact that we had good strong demand for the wheat crops. By Friday on the Chicago Board of Trade, the price of maize for September delivery fell to $3.235 a bushel, from $3.547 a week earlier.

Wheat for September delivery firmed to $6.24 a bushel, from $6.20.

August-dated soyabean meal — used in animal feed — decreased to $8.61, from $9.21.

On the LIFFE, the price per ton of wheat for November delivery rose to 124.50 pounds, from 118.85 pounds.

SUGAR: Sugar prices rose on keen buying interest.

Market participants believe speculative and trade buying is helping to push the market up, though some producer selling limited gains, Davies added.

By Friday on the LIFFE, the price a ton of white sugar for October delivery rose to $312.80, from $309.40 a week earlier.

On the NYBOT, the price of unrefined sugar for October delivery firmed to 10.31 US cents a pound, from 9.99 cents a week earlier.

RUBBER: The price of rubber was firmer on Friday amid beneficial growing conditions in key producer Malaysia.

The weather in Malaysia was expected to be favourable with rubber supply being good, said an official at a rubber producing firm.

On Friday, the Malaysian Rubber Board’s benchmark SMR20 rose to 205.80 US cents per kilogram, compared with 200.45 US cents last week.

—AFP