World oil prices hit new heights

Published August 7, 2005

LONDON, Aug 6: World oil prices jumped to new historic peaks above $62 this week, driven by disruptions across refineries, while the death of Saudi Arabia’s King Fahd provided only limited support to crude futures. Copper continued to post fresh record highs on strong Chinese demand.

The Commodities Research Bureau’s index of 17 commodities rose to 315.24 points on Friday, from 310.75 points the previous week.

GOLD: Gold prices rose to the highest level for more than a month, as the euro strengthened against the dollar.

Dollar weakness continued to underpin the precious metals, said James Moore, an analyst for the specialist website TheBullionDesk.com.

The single European currency reached the highest level against the dollar this week for more than two months as a raft of economic data from the eurozone suggested that activity levels was picking up across the 12-nation bloc.

The dollar won back some ground Friday after data showed that US employment creation powered ahead in July with an extra 207,000 jobs.

A weaker dollar makes gold, which is priced in the US currency on world markets, more attractive to buyers using other currencies. Gold is also seen as a good hedge against fluctuations in the value of the dollar.

On the London Bullion Market, gold prices climbed to 438.25 dollars per ounce at the late fixing on Friday from 429 dollars the previous week.

SILVER: Silver prices climbed on the back of gold’s rise.

The direction for silver is looking less clear at the moment with the metal’s inability to clear 7.30 dollars suggesting a pull back to between 7.10 and $7.15 may be in order, Moore said.

On the London Bullion Market, silver prices rose to $7.205 per ounce at the late fixing Friday from $7.145 the previous week.

PLATINUM AND PALLADIUM: Platinum prices reached the highest level for more than one year, supported by speculative buying, whilst palladium showed little change.

Platinum rose to 912 dollar per ounce at Wednesday’s fixing on the London Platinum and Palladium Market — a level not reached since April 2004.

UBS analyst John Reade said platinum was unlikely to remain above 900 dollars for long since the metal was being driven by speculative buying, whilst Chinese demand would cool at current price levels.

By Friday, platinum prices advanced to 908 dollars per ounce on the London Platinum and Palladium Market from $898 the previous week.

Palladium prices stood at $191.50 per ounce on Friday from 4192.

BASE METALS: Base metals prices extended gains, lifted by copper reaching fresh record high points.

Copper futures reached a historic record 3,594 dollars per ton on Wednesday, lifted by strong Chinese demand, strike threats in producer regions and stockpiles of the metal being at the lowest levels for 30 years in London.

By Friday, three-month copper prices jumped to 3,594 dollars per tonne on the London Metal Exchange from $3,540 the previous week.

Three-month aluminium prices rose to $1,897 per ton Friday from 1,860.50 dollars.

Three-month nickel prices stood at 14,225 dollars per tonne on Friday from $14,230.

Three-month lead prices gained to $863.50 per ton Friday from 4852.

Three-month zinc prices extended to $1,296.00 per ton Friday from $1,261.50.

Three-month tin prices climbed to $7,160 per ton Friday from $7,080.

OIL: World oil prices hit new record high points as disruptions to US refineries gave rise to concerns about availability of gasoline, or petrol, supplies.

New York’s main contract, light sweet crude for delivery in September, reached a record $62.50 per barrel on Wednesday, the same day that the price of Brent North Sea crude oil for delivery in September hit a historic peak of $61.26.

They beat records reached on Monday in the wake of refinery problems.

The latest disruption affected US oil giant ExxonMobil, which by Friday had failed to reopen a major refinery in Joliet, Illinois as scheduled.

The death of Saudi Arabia’s King Fahd meanwhile provided only limited support to oil prices on Monday, with the event seen as unlikely to disrupt energy production in the world’s biggest exporter of crude.

The monarch’s death certainly won’t change the Saudis’ view on how to export, one London trader said.

The internal politics might change a bit but on the oil side I don’t think there is going to be a change at all.

King Fahd, who was believed to be 84, died in hospital on Monday after a long period of ill health that saw him hand over the reins of power in the last years of his turbulent rule.

His half-brother Crown Prince Abdullah, de facto ruler for a decade, was swiftly apointed his successor and powerful Defence Minister Sultan bin Abdul Aziz was chosen as crown prince of the ultra-conservative Gulf kingdom.

Saudi Arabia is the world’s biggest oil exporter, producing about 9.5 million barrels per day and has the capacity for an additional daily quota of 1.5 million.

By Friday, New York’s light sweet crude for September delivery jumped to $62.15 per barrel from $60.43 the previous week.

In London, Brent North Sea crude for September delivery gained to 60.84 dollars per barrel from 59.24 dollars.

RUBBER: Rubber prices fell after recent highs.

There was an indication that the market was moving down maybe because of a correction, said Rachid Ahmed, a trader at Corrie Maccoll.

Tokyo’s September contract had reached 200 yen on July 22, the highest level since June 1988.

On TOCOM, Tokyo’s commodity exchange, natural rubber for September delivery fell to 188.90 yen on Friday, from 199.60 yen a week earlier.

Singapore’s RSS 3 September contract eased to 168.50 US cents on Friday, from 172 cents.

COCOA: Cocoa futures fell on profit-taking after climbing the previous week on renewed violence in major producer Ivory Coast.

Most of the action was technical... and dollar weakness gave only minimal buying support, Refco analyst Ann Prendergast said.

Ivory Coast, the world’s top cocoa producer, has been split in two since a failed coup against President Laurent Gbagbo in September 2002, pitting rebels from the Muslim-dominated north against the Christian-populated south.

On LIFFE, London’s futures exchange, the price of cocoa for September delivery dropped to 860 pounds per tonne on Friday from 876 pounds a week earlier.

On the CSCE, the New York futures market, the September contract decreased to $1,458 per ton on Friday, from $1,464.

COFFEE: Coffee prices gained ahead of a harvest forecast in major producer Brazil.

Mostly the market was waiting and seeing, Prendergast said.

There is talk that next week’s forecast from Brazil’s Agriculture Ministry will put the crop at 30 million bags or so, which could ultimately be bullish for the market.

On LIFFE, Robusta quality for September delivery edged up to 1,115 dollars per tonne on Friday from 1,106 dollars a week earlier.

On New York’s CSCE market, Arabica for September delivery rose to 106.60 US cents per pound on Friday, from 102.20 cents.

SUGAR: Sugar prices advanced on speculative buying amidst expectations that demand will outpace supply.

Sentiment and fundamentals both point higher, as Brazil supply runs down and consumer demand from the Middle East builds, Prendergast said.

By Friday on LIFFE, the price of a tonne of white sugar for October delivery gained to 292.50 dollars from 287 dollars a week earlier.

On the CSCE in New York, a pound of unrefined sugar for October delivery stood at 10.19 US cents on Friday from 9.88 cents.

GRAINS AND SOYA: Grains and soya prices dropped, as rain fell sporadically on the United States’ Midwest region.

On LIFFE, wheat for September delivery eased to 66.60 pounds per ton on Friday from 66.70 pounds a week earlier.

In Chicago, the price of wheat for September delivery dropped to 320.50 US cents per bushel Friday from 332.25 cents.

Maize for September delivery fell to 221.75 cents per bushel on Friday from 239.50 cents.

Soyabeans for August delivery declined to 657 cents per bushel on Friday from 678 cents.

August-dated soyabean meal — used in animal feed — decreased to $209.80 per ton on Friday from $214.50.

COTTON: Cotton prices steadied in the absence of fresh leads.

The market is in its midsummer doldrums as traders wait to hear some fresh news that will provide some impetus, Prendergast said.

New York’s December contract eased to 51.95 US cents per pound on Friday from 52.80 cents the previous week.

The Cotton Outlook Index of physical cotton stood at 56.05 cents on Thursday from 54.15 cents a week earlier.

WOOL: Wool prices fell after the re-opening of the market in Australia, the world’s biggest producer.

The downward pressure seen in Melbourne in the last week before the break continued into the opening sales when the Australian wool market finished this week with prices 3.0-per cent lower, on average, the Australian Wool Industries Secretariat said.

Australia’s wool market had closed on July 21 for two weeks owing to the summer holiday period and reopened on August 1.

The Australian Eastern index fell to 7.17 Australian dollars per kilo on Thursday, from $7.27 on July 21.

The British Wooltops index stood at 417 pence on Thursday, unchanged from the previous week.—AFP

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