LONDON, Jan 3: Commodities rode a rocky ride in 2008, with crude oil, gold and base metals hitting historic peaks on supply woes, before tumbling as a global financial crisis sparked demand worries.

Commodity markets have had to cope with a complete reshaping of the economic landscape, and in a very short space of time have priced in expectations of a recession in both the global economy and demand, Barclays Capital analysts wrote in a research note.

They added: “Although the pace of decline in commodity prices has slowed in December, there is still potential downside risk to prices should financial markets remain unstable... and global growth projections be cut further. After a hectic 2008, most commodity markets began winding down for the Christmas and New Year holidays on Friday, December 19, 2008. Normal trading volumes were expected to resume on Monday, January 5, 2009.

OIL: World oil prices fell by about 54 per cent in 2008 as a sharp global economic slowdown weighed on energy demand in the second half of the year.

However, in the first half, crude futures rocketed to record highs of above 147 a barrel in July on fears of supply disruptions.

Towards the end of 2008, prices slumped to just above 33 dollars -— the lowest in four and a half years. Prices rallied this week as the Israeli-Hamas conflict in Gaza stoked tensions in the key oil-producing Middle East.

Analysts said the market had also been supported by evidence that the Opec oil producers’ cartel was cutting output in line with an announcement earlier this month. Previous Opec cuts have often been met with partial compliance.

Crude oil began 2008 by vaulting above 100 dollars for the first time as traders worried about violence in oil exporter Nigeria and supply problems in the key US energy market.

Continued geopolitical tensions then saw oil rocket above 120, 130 and 140 dollars on their way to setting all-time highs by mid-year.

By Friday on the New York Mercantile Exchange (NYMEX), light sweet crude for delivery in February jumped to $46.05 which compared with 36.91 dollars per barrel on December 19.

On London’s InterContinental Exchange (ICE), Brent North Sea crude for February increased to $46.89 , from 44.67.

PRECIOUS METALS: Gold and silver edged higher in 2008, while palladium and platinum lost between 40-50 per cent of their value, pulled lower by recession concerns.

Gold had soared to a historic peak of $1,032.70 on March 17, 2008, as investors sought a safe haven against a backdrop of tumbling world stock markets, a falling dollar and record oil prices, dealers said.

Gold remains the big winner of 2008, said analyst Simon Denham at Capital Spreads in London.

For all of the headlines gold is not a huge market and any move away by major (investors) may develop into a heavy fall, he cautioned.

Meanwhile, silver hit a 27-year pinnacle at $21.35 per ounce last March.

Gold, which is used in jewellery, dentistry and electronics, also benefited from its status as a safe bet in times of economic and geopolitical turmoil. Stocks around the world were rocked in 2008 by the global financial crisis and international credit crunch.

Over the past week, precious metals rose amid ongoing unrest in the Middle East.

On the London Bullion Market on Friday, gold increased to $874.50 an ounce at the late fixing from $835.75 a week earlier.

Silver increased to 11.08 dollars an ounce from $10.61 .

On the London Platinum and Palladium Market, platinum gained to 926 dollars an ounce at the late fixing on Friday from 848 dollars on December 19.

Palladium climbed to 185 dollars an ounce from $172 .

BASE METALS: Base metals prices rebounded this week after traumatic losses last year.

In 2008, aluminium shed 36 per cent and copper erased 54 per cent. Nickel and zinc sank by 55 per cent and 49 per cent respectively, while tin declined by 35 per cent. The worst performer was lead, which lost 61 per cent in value.

However, during the first half of 2008, aluminium, copper and tin scored historic highs on the back of supply concerns in key producer nations.

Aluminium, which set a record high $3,380 per ton on July 11, dived to a five-year low of $1,430.50 per ton on December 18.Tin was another casualty, sliding in December to $9,700 per ton, which was last seen in November 2006.

The metal had touched a historic high of 25,500 dollars in May 2008, supported by dwindling global supplies and production problems in Indonesia.

Lead, meanwhile, sank in December to 851 dollars per ton, matching a level last seen in September 2005.

By Friday, copper for delivery in three months jumped to $3,169 a ton on the London Metal Exchange from 2,870.25 on December 19.

Three-month lead advanced to $1,080 a ton from $891.

Three-month zinc rose to$ 1,251 a ton from$1,105.

Three-month tin gained to $11,500 a ton from $10,415 .

Three-month nickel increased to $12,875 a ton from $10,100 .

COCOA: Cocoa futures fell this week but found support in 2008 from a tight global supplies.

The market at the moment is holding pretty well, said Sucden anlayst Stephanie Garner, who cited tight supplies in West Africa as a key supportive factor.

London cocoa prices had hit a record high of 1,822 pounds per ton on December 19. The previous day, New York prices stretched as high as $2,718 a ton -- the highest since last September.

On the New York Board of Trade (NYBOT), the March cocoa contract decreased to $2,542 a ton from $2,661 .

GRAINS AND SOYA: Grains and soya prices held steady but remained far below record highs touched last year.

2008 has been a year of chequered fortunes for the grains markets, with corn, wheat and soybean all hitting fresh all-time highs before dropping 50-65 per cent from their peaks,” said Barclays Capital analysts.

In February 2008, wheat had rocketed to an historic peak of $13.495 per bushel in Chicago thanks to tumbling inventories and keen global demand, traders said.

COFFEE: Coffee prices dipped in London this week in thin trade as recession fears also rattled traders.

By Friday on LIFFE, Robusta for delivery in March fell to $1,589 a ton from $1,818 a week earlier.

SUGAR: Sugar prices rose this week, aided by rebounding oil prices. Sugar is used in the production of ethanol, a cheaper alternative to motor fuel which is refined from crude oil. When crude futures rise, demand increases for ethanol.

By Friday on LIFFE, the price of a ton of white sugar for delivery in March rose to 327 pounds from 313.20 pounds on December 19.

On NYBOT, the price of unrefined sugar for March gained to 11.88 US cents per pound from 11.18 cents.

RUBBER: Malaysian rubber prices gained ground, supported by poor weather in producing countries and measures to boost prices that have been hit by the economic slowdown.

On Friday, the Malaysian Rubber Board’s benchmark SMR20 rose to 130.70 US cents per kilo, from 124.45 US cents per kilo.—AFP