LONDON: Oil plunged close to six-year lows this week on oversupply worries, before staging a slight recovery as the International Energy Agency (IEA) declared there were signs that “the tide will turn”.

Commodity investors also digested the Swiss central bank’s shock move to abandon its policy of weakening the franc, while traders readied for next week’s pivotal ECB meeting.

Read: Oil prices plunge to near six-year low

Some commodities were weighed down by the strong dollar. The euro hit an 11-year low on Friday under $1.15 on the increasing prospect of fresh stimulus from the ECB, dealers said.

OIL: European benchmark Brent tumbled on Tuesday to $45.19 per barrel, a level last seen in March 2009, while New York crude struck a similar low at $44.20.

The oil market had fallen on Thursday on news that the Opec had overproduced in December, while it also cut its global demand outlook. It also projected that demand for its oil would fall to 28.8m barrels per day this year from 29.1m in 2014.

By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in March eased to $49.50 a barrel from $49.67 for the February contract the previous week.

On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for February reversed to $47.16 a barrel from $47.96.

GOLD: Gold rallied to a four-month peak at $1,279 per ounce on Friday, as investors sought shelter from ongoing markets turmoil.

By Friday on the London Bullion Market, the price of gold rallied to $1,277.50 an ounce from $1,217.75 a week earlier.
Silver climbed to $16.92 an ounce from $16.24. On the London Platinum and Palladium Market, platinum grew to $1,262 an ounce from $1,225. Palladium edged down to $757 an ounce from $795.

BASE METALS: The price of copper tumbled to the lowest level for more than five years after the World Bank slashed its global economic forecasts, parking doubts over the demand outlook for the metal.

Copper dived on Wednesday to $5,353.25 per tonne, a level last witnessed in July 2009. The World Bank on Tuesday predicted that the global economy would grow by 3.0pc in 2015. That marked a downgrade from the previous forecast of 3.4pc that was given in June.

By Friday on the London Metal Exchange, copper for delivery in three months sank to $5,679 a tonne from $6,112 the previous week.

Three-month aluminium slid to $1,802 a tonne from $1,820.50. Three-month lead retreated to $1,785.25 a tonne from $1,820.50. Three-month tin dipped to $19,400 a tonne from $19,630. Three-month nickel slid to $14,567 a tonne from $15,508.

COCOA: Cocoa futures declined as traders digested signs of cooling demand in Europe and North America.

By Friday on LIFFE, London’s futures exchange, cocoa for delivery in March dropped to £2,031 a tonne from £2,050 a week earlier. On the ICE Futures US exchange, cocoa for March fell to $2,946 a tonne from $2,993.

SUGAR: Prices enjoyed one-month peaks, driven by worries that a lack of rain could hurt sugar production in key producer Brazil.

By Friday on LIFFE, the price of a tonne of white sugar for delivery in March gained to $401 from $390.10 a week earlier. On ICE Futures US, the price of unrefined sugar for March rose to 15.44 US cents a pound from 14.84 US cents.

COFFEE: Coffee prices dipped in subdued trade on forecasts of flat output in Brazil.

By Friday on ICE Futures US, Arabica for delivery in March dropped to 173 US cents a pound from 181.50 cents a week earlier. On LIFFE, Robusta for March decreased to $1,971 a tonne from $1,992.

RUBBER: Prices sank after the World Bank slashed its economic growth forecasts, with additional pressure stemming from sliding oil prices. Crude oil is used in the production of synthetic rubber.

The Malaysian Rubber Board’s benchmark SMR20 on Friday fell to 139.90 US cents a kilo from 144.45 cents the previous week.

Published in Dawn, January 18th, 2015

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