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LONDON, Feb 24: World oil prices surged this week, as global supply concerns propelled them above 61 dollars for the first time this year. Gold and silver hit their highest levels for nine months in the wake of oil's rally.
OIL: Crude futures jumped on a number of factors, including falling stockpiles of US gasoline, tensions over Iran's nuclear ambitions, violence in Nigeria and the shutdown of the biggest refinery in the United States.
Thursday's weekly inventory report from the US Department of Energy (DoE) showed that gasoline inventories fell by 3.1m barrels to 222.1m in the week ending February 16.
At the same time, demand for gasoline is higher than a year earlier.
As the market approaches the second quarter, where demand for heating oil is traditionally lower, focus has switched towards gasoline, or petrol, with the US driving season beginning in May that sees Americans take to their cars on holiday.
Distillates are less important now, it's (the drop in) gasoline (stocks) that took the market's notice, Global Insight analyst Simon Wardell said.
Another boost to prices came from a report by the International Atomic Energy Agency which declared that Iran, one of the world's biggest producers of crude, had failed to suspend uranium enrichment.
Should the international community respond by punishing Iran with economic sanctions, the Islamic nation may decide to disrupt its oil exports, according to some experts.
Oil traders were tracking also fresh unrest in Nigeria, Africa's biggest producer of crude, where militants killed and kidnapped more foreign nationals this week.
By Friday in London, a barrel of Brent North Sea crude for delivery in April soared to $61.21 per barrel, from $58.39 the previous week.
In New York, a barrel of crude for delivery in April rallied to $61.45 per barrel from $58.80.
GOLD: The price of gold struck the highest level since May, 2006 on concern about inflation and after other metals and oil futures rallied.
Gold reached 688.56 dollars per ounce, the highest level since May 19 last year.
The market was concerned about inflation in the (United) States and the rally in both metals and oil, said Ross Norman, an analyst at specialist website TheBullionDesk.com.
Barclays Capital analyst Sudakshina Unnikrishnan added: Gold prices rallied... supported by firmer oil prices.Gold is seen as a good hedge against inflation.
US consumer prices jumped in January, the government reported on Wednesday, a week after Federal Reserve chief Ben Bernanke warned that inflation remains the central bank's top concern.
The Labour Department said the consumer price index advanced 0.2 per cent last month compared to December on surging food and medical costs. The “core”CPI rate, which excludes volatile food and energy prices, went up 0.3 per cent.
On the London Bullion Market, gold prices jumped to $683 per ounce at Friday's late fixing, from $665.10 the previous Friday.
SILVER: Silver prices struck 14.64 dollars per ounce -- the highest point since May 12, 2006.
The metal continues to benefit from strong buying from speculative and investor sources, said James Moore of TheBullionDesk.com.
On the London Bullion Market, silver prices advanced to $14.28 per ounce at Friday's late fixing, from $13.90 the previous week.
PALLADIUM AND PLATINUM: The price of platinum reached $1,239.50 per ounce -- the highest level since November 21 last year.
Propelling the metal upwards was news that 19,000 mine workers employed by platinum producer Lonmin had begun an illegal strike in South Africa over late wage payments.
Palladium prices meanwhile reached an eight-month high of $356.50 per ounce, helped by platinum's rally.
On the London Platinum and Palladium Market, platinum rose to $1,234 per ounce at the late fixing Friday, from $1,195 the previous week.
Palladium stood at $353 per ounce, from $338 one week earlier.
BASE METALS: Lead and nickel prices hit record highs owing to low stocks.
A ton of lead for delivery in three months hit $1,942 on the London Metal Exchange -- the highest reading for the base metal since the start of its quotation on the LME in 1953.
The International Lead Zinc Study Group estimated that the zinc market was in deficit by 332,000 tons in 2006.
A ton of nickel meanwhile struck an historic high $40,400.
On Friday, three-month copper prices surged to $6,231.50 per ton on the London Metal Exchange, from $5,820 the previous week.
Three-month aluminium prices advanced to $2,830 per ton from $2,792.
Three-month nickel prices gained to $39,895 per ton from $38,900.
Three-month lead prices climbed to $1,915 per ton from $1,780.
Three-month zinc prices rallied to $3,560 per ton from $3,385.
Three-month tin prices increased to $13,300 per ton from $13,100 a week earlier.
COCOA: Cocoa prices slid on profit-taking, after striking a seven-month high the week before on fears of a supply shortage.
“The market remains vulnerable to further losses” as investment funds line up to bank more profits, Sucden analyst Michael Davies said.
By Friday on the LIFFE, London's futures exchange, the price of cocoa for May delivery fell to 971 pounds per ton, from 978 pounds a week earlier.
On the New York Board of Trade (NYBOT), the May contract eased to $1,779 per ton on Friday, from 1,785 dollars the previous week.
COFFEE: Coffee prices hit a six-week low in London and three-month nadir in New York as speculators exited the market.
But a rally towards the end of the week, helped in part by industry buying, left prices higher compared with a week earlier.
By Friday on the LIFFE, Robusta quality for May (new contract) delivery rose to $1,575 per ton, from 1,533 dollars a week earlier.
On the NYBOT, Arabica for May delivery increased to 119.90 US cents per pound on Friday, from 117 cents the previous week.
SUGAR: Sugar prices limited losses after the European Union agreed to a 12-per cent cut in sugar production quotas for the 2007-2008 season to avoid a glut on the market.
Without this measure the (EU) sugar market would suffer a major surplus situation which would severely affect the whole sector, the EU said in a statement.
A fortnight ago, prices had dropped to the lowest point in four and a half months after the International Sugar Organization revised upwards its supply forecast for 2007.
By Friday on the LIFFE, the price of a ton of white sugar for May delivery dipped to $333, compared with $334.50 s a week earlier.
On the NYBOT, the price of unrefined sugar for May delivery stood at 10.70 US cents per pound, from 10.84 US cents the previous week.
GRAINS AND SOYA: Grains and soya prices extended gains in Chicago, benefiting from concerns about potential supply shortages and higher US inflation.
There are still very thin stocks of corn and wheat and no evidence that the demand for corn is going down, Allendale analyst Joe Victor said.
Investment funds are buying commodities on fears that inflation could be more important this year in the US. They don't only buy cereals but also orange juice, coffee or sugar on the fears that prices might rise. On the Chicago Board of Trade, the price of wheat for March delivery rose to US$4.86 per bushel on Friday, from $.68 the previous week.
Maize for March delivery climbed to $4.3150 per bushel on Friday, from $4.17 the previous week.
March-dated soyabean meal -- used in animal feed -- advanced to $7.8050 on Friday, from $7.67 the previous week.
On the LIFFE, the price of a ton of wheat for May delivery gained to 94.50 pounds, from 92.60 pounds the previous week.--AFP
