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LONDON, March 11: World oil prices dropped below $60 this week after official data revealed robust US energy stockpiles and the Opec cartel maintained its crude production levels at a 25-year high.
Concerns over higher interest rates around the world weighed on metals.
The Commodities Research Bureau’s index of 17 commodities fell to 319.19 points on Friday, from 328.83 points the previous week.
GOLD: Gold prices dropped $30.0 on selling by speculative funds spooked by expectations of higher global interest rates.
Higher borrowing costs sees funds switching investments from commodities to currencies.
“Interest rate speculation triggered another retreat by speculative/fund players” in the gold market, said James Moore, analyst with specialist website TheBullionDesk.com.
Investors remained concerned about rising global interest rates, highlighted by a decision from the Bank of Japan this week to end its policy of “quantitative easing” or flooding the market with liquidity.
This may be a prelude to lifting Japanese borrowing costs.
Analysts expect also the US Federal Reserve and European Central Bank to continue hiking rates.
On the London Bullion Market, gold prices fell to 535 dollars per ounce at Friday’s late fixing from 565 dollars the previous week.
SILVER: Silver prices fell in the wake of sister metal gold.
Silver was again taking its lead from the gold market, Moore said.
The previous week silver had struck the highest level for more than 22 years owing to strikes by miners in Mexico.
On March 3, silver prices climbed to $10.32 per ounce — the highest level since September 1983.
On the London Bullion Market, silver prices slid to 9.85 dollars per ounce at Friday’s fixing, from 10.26 dollars the previous week.
PALLADIUM AND PLATINUM: Platinum and palladium prices mirrored losses made by gold and silver.
Platinum and palladium both showed signs of weakening as both metals succumbed to the long liquidation seen in gold and silver, Moore said.
On the London Platinum and Palladium Market, an ounce of platinum fell to 1,006 dollars per ounce at the late fixing on Fridy, compared with 1,059 dollars the previous week.
Palladium recoiled to 286 dollars per ounce on Friday, from 303 dollars.
BASE METALS: Base metals prices were hit also by concerns over interest rates.
“Current trading conditions remain highly nervous, creating large price volatility, with market participants particularly uncertain over the effects of a rising interest rate environment across major economies,” Barclays Capital analyst Ingrid Sternby said.
On Friday, three-month copper prices on the London Metal Exchange dropped to 4,772 dollars per ton from 4,965.50 dollars the previous week.
Three-month aluminium prices dollars fell to 2,475 dollars per ton from 2,365.50 dollars.
Three-month nickel prices decreased to 14,775 dollars per ton from 15,255 dollars.
Three-month lead prices slipped to 1,175 dollars per ton from 1,226 dollars.
Three-month zinc prices declined to 2,239 dollars per ton from 2,365.50 dollars.
Three-month tin prices slid to 7,825 dollars per ton from 7,880 dollars.
OIL: World oil prices plunged Wednesday after data revealed US crude stocks at a near seven-year high and the Organization of the Petroleum Exporting Countries (Opec) agreed to keep its oil output at a near 25-year high.
Crude futures in London and New York dived below 60.0 dollars per barrel, hitting the lowest intra-day levels since February 17.
“We had a huge US crude build and Opec said they’re going to just keep pumping at high levels, so between the two of those it’s pretty easy to understand the sell-off,” PFC Energy analyst Jamal Qureshi said.
Opec, meeting in Vienna on Wednesday, agreed to keep its oil output at 28.0 million barrels per day (bpd).
The decision came as the US Department of Energy (DoE) reported that US crude reserves rose by 6.8 million barrels to 335.1 million in the week to March 3. That was way above market forecasts for a rise of 1.5 million barrels.
US crude oil reserves are some 10 per cent higher than at the same stage a year ago, and are at their highest level since May 1999, the DoE said.
Oil prices recovered above 60 dollars per barrel on Thursday and Friday owing to concerns that Iran, the world’s fourth biggest producer of crude, could cut its exports if hit by economic sanctions over its nuclear programme.
Western powers led by the United States want to curb Iran’s nuclear activities amid fears that the country is aiming to develop nuclear weapons. Tehran has insisted that its research is for peaceful purposes.
In London, a barrel of Brent North Sea crude for delivery in April dived to 61.27 dollars per barrel on Friday, from 63.97 dollars the previous week.
In New York, a barrel of crude for delivery in April slid to 60.58 dollars per barrel Friday from 63.15 dollars.
RUBBER: Rubber prices fell.
‘Prices lost ground throughout the week,’ said Rashid Ahmed, analyst at Corrie MacColl. ‘It seems to be the result of profit-taking.’
Prices had gained slightly the previous week amid the ongoing wintering season in major Asian producers.
COCOA: Cocoa prices rose on speculative buying ahead of the April-September crop in Ivory Coast.
The West African country produces nearly 40 per cent of the world’s cocoa supplies.
COFFEE: Coffee prices receded on speculative selling amid weather conditions expected to aid the harvest in Vietnam.
“A broad sell off in most commodities over the last few days is also weighing on the coffee market,” Sucden analysts said.
SUGAR: Sugar futures weakened in New York on speculative selling.
By Friday on LIFFE, the price of a ton of white sugar for May delivery stood at 442 dollars, from 440 dollars the previous week.
On NYBot, the price of unrefined sugar for May delivery slipped to 16.39 US cents per pound on Friday, from 16.93 cents.
GRAINS AND SOYA: Grain and soya prices mainly headed lower owing to forecasts of rain in the United States which favours crop growth.
On the LIFFE, the price of a ton of wheat for May delivery stood at 72 pounds late Friday, from 72.50 pounds a week earlier.
On the Chicago Board of Trade, the price of wheat for March delivery rose to 3.72 US dollars per bushel on Friday, from 3.71 dollars.
Maize for March delivery fell to 2.22 dollars per bushel Friday from 2.30 dollars.
March-dated soyabean meal — used in animal feed — dropped to 5.72 dollars per ton, from 5.92 dollars.
COTTON: Cotton prices climbed in New York as US exports rebounded.
On the New York Cotton Exchange (NYCE), the May contract advanced to 54.40 US cents per pound on Friday, from 54.30 US cents one week earlier.
The Cotton Outlook Index of physical cotton stood at 58.65 US cents on Thursday, from 59.55 cents the previous week.
WOOL: Wool prices reached the highest level for one year and a half owing to strong Chinese demand and a drop in the Australian dollar against its US counterpart.—AFP
