LONDON, Oct 6: World oil prices fell further from historic highs this week amid news of rising crude reserves in the United States, which is the biggest global energy consumer.
Oil and other dollar-denominated commodities were buoyed by a weak US dollar, which makes them cheaper for buyers using stronger currencies.
A spirited rally on Friday by the US dollar, which followed a strong report on US job creation in September, fizzled out as the news was not enough to sustain investor confidence in the US unit.
In recent weeks, the greenback has come under pressure on speculation that the US Federal Reserve, which reduced borrowing costs by half a point last month, will continue to cut borrowing costs as signs emerge of a US slowdown.
The European single currency had surged Monday to a record high of $1.4283.
OIL: The price of Brent crude oil dropped from its record high of $81.05 per barrel this week, but remained supported by tight energy supplies ahead of the northern hemisphere winter, when demand for heating fuel peaks.
Traders are starting to worry about the heating oil inventory in the US market, said Victor Shum, an analyst with energy consul-tancy Purvin and Gertz.
In the summer, traders worried about the gasoline (petrol) level. Now, traders are starting to worry about the heating oil level. Traders focus on reserves in the United States because the country is the world’s biggest energy consumer, ahead of number two China.
The US Department of Energy’s (DoE) weekly report released Wednesday showed stockpiles of distillates, including heating fuel, unexpectedly dropped by 1.2 million barrels to 135.9 million barrels during the week ended September 28.
Industry analysts had forecast a rise of 1.3 million barrels.
Crude oil rose by 1.2 million barrels last week, the DoE report showed.
Most analysts had expected oil reserves to fall.
The overall oil market remains fundamentally tight in the fourth quarter,Shum said.
A week ago, Brent oil hit a record high $81.05, while New York crude struck an all-time peak of $84.10 last month.
By Friday, Brent North Sea crude for November delivery sank to $78.70 a barrel, from $79.55 a week earlier.
New York’s main oil futures contract, light sweet crude for delivery in November, tumbled to $80.75 a barrel, from $82.10 a week earlier.
PRECIOUS METALS: Gold prices surged to the highest level for 27 years as the sliding US dollar boosted the precious metal.
On the London Bullion Market, gold prices leapt as high as $747.90 an ounce -- which was last seen in January 1980 -- before paring its gains.
Gold has also found support from recent record crude oil prices, which have raised fears about rising inflation. Gold is regarded as a store of value and a hedge against inflation.
Other precious metals gained from gold’s surge, with silver hitting $13.86 -- the highest since last April -- before pulling lower.
On the London Bullion Market, gold eased to $737 an ounce at Friday’s late fixing, from $743 a week earlier.
Silver decreased to $13.43 an ounce at Friday’s late fixing, from $13.65 a week earlier.
On the London Platinum and Palladium Market, platinum fell to $1,364 an ounce at the late fixing Friday, from $1,377 a week earlier.
Palladium climbed to $366 an ounce, from $343.75.
BASE METALS: Base metals prices were mixed, but star performer lead hit another record high amid persistent supply problems.
The price of lead for delivery in three months hit an historic $3,720 a ton on the London Metal Exchange.
Lead was underpinned by a slew of supply side disruptions, tightness in the lead concentrate market, the seasonally strong winter battery demand season and declining Chinese lead exports, said Barclays Capital analysts.
Global stockpiles of lead are already at historically low levels.
On Friday, the price of copper for delivery in three months advanced to $8,245 a ton on the London Metal Exchange, from $8,098 a week earlier.
Three-month aluminium prices declined to $2,436 a ton, from $2,518.
Three-month nickel prices fell to $30,500 a ton, from $31,450.
Three-month lead prices increased to $3,675 a ton, from $3,380.
Three-month zinc prices eased to $3,055 a ton, from $3,080.
Three-month tin prices climbed to $16,025 a ton, from $15,520.
COCOA: Cocoa prices suffered heavy losses, plunging by 4.0 per cent in London and almost 9.0 per cent in New York as speculators took profits after a recent strong run.
Two weeks ago, prices had soared to two-month peaks on concerns over tight supplies in leading producer Ivory Coast.
By Friday on the LIFFE, London’s futures exchange, the price of cocoa for December delivery sank to £958 a ton, from 999 pounds a week earlier.
COFFEE: Coffee prices were mixed in subdued trading conditions.
By Friday on the LIFFE, Robusta quality for November delivery decreased to $1,904 a ton, from $1,910 one week earlier.
On the NYBOT, Arabica for December delivery rose to 135.45 US cents a pound, from 128.15 cents.
SUGAR: Sugar prices turned sour, falling in both London and New York.
Meanwhile, India is on course to overtake Brazil as the world’s biggest sugar producer in 2007/ 2008, the International Sugar Organisation said earlier this year.
Global sugar output was forecast to outpace demand by a record 10.8 million tons in the crop year ending September 2008, according to the ISO.
By Friday on the LIFFE, the price per ton of white sugar for December delivery dipped to 277 pounds, from 280.50 pounds a week earlier.
On the NYBOT, the price of unrefined sugar for March delivery receded to 9.85 US cents a pound, from 10.12 cents a week earlier.
GRAINS AND SOYA: The prices of grains and soya pulled back after a record-breaking week that saw wheat hit a record close of $9.52 per bushel in Chicago on Monday.
With bad weather damaging harvests in several countries, wheat prices have nearly doubled since January, surging past $9.0 per bushel, while soybeans reached a record $10.0 last week.
US farmers are likely to boost wheat and soyabean crops in 2008 in response to critically high prices, potentially displacing others such as corn and cotton, analysts said.
By Friday on the Chicago Board of Trade, the price of maize for December delivery dipped to $3.42 a bushel, from $3.73 a week earlier.
Wheat for December delivery eased to $9.04 a bushel, from $9.47 the previous week.
November-dated soyabean meal -- used in animal feed -- slipped to $9.51, from $9.91.
On the LIFFE, the price per ton of wheat for May delivery stood at 178.00 pounds on Friday.
RUBBER: Rubber prices were flat, with traders mainly sidelined as China, the world’s largest buyer, was closed for a week-long holiday.
Traders said that concerns over tight supplies supported the market.
By Friday, the Malaysian Rubber Board’s benchmark SMR20 was at 216.70 US cents per kilo, unchanged from the previous week.
WOOL: Prices rose in major producer Australia.
It was a good market, particularly among the fine wools, the Australian Wool Industry Secretariat said, adding that strong demand came from China and Europe.
The Australian wool market finished the week 0.8 per cent higher on average, with the Eastern Index gaining 7 cents to close at $9.26 a kilo.---AFP
