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LONDON, March 24: World crude oil prices leapt to 2007 peaks this week as commodity markets were jangled by supply worries in major consumer the United States and geopolitical jitters over key crude producer Iran.
However, many raw materials — including gold, silver, copper and star performer tin — were boosted by the belief that a US interest rate cut could be in the offing, analysts said.
They added that any potential rate cut in the United States -- the world's biggest economy -- would likely bolster the demand outlook for most commodities.
OIL: World oil prices were driven to the highest levels of the year by news that 15 sailors from a British warship had been seized by Iranian naval vessels in the Gulf.
Iran, a key crude producer, seized the sailors on because they had illegally entered its territorial waters, state television quoted the foreign ministry as saying on Friday.
Crude futures found further support from weak levels of gasoline or petrol stocks in the United States ahead of the peak-demand driving season, starting in May, when many Americans take to the roads for holidays.
On Friday, London Brent crude hit $63.68 per barrel, the highest since December 8, 2006, while New York crude leapt to $62.65 per barrel, which was last witnessed on December 22.
Britain's Ministry of Defence, meanwhile, said that the sailors had been engaged in “routine” anti-smuggling operations in Iraqi waters, and demanded their immediate release.
It's premature to judge the seriousness of this incident, but it is potentially explosive, said Fimat analyst John Kilduff.
Iran is the world's fourth-biggest producer of oil and is the second-biggest player in the Organization of the Petroleum Exporting Countries after cartel kingpin Saudi Arabia.
The news came as the United Nations Security Council prepared to vote on new sanctions aimed at forcing Tehran to curb its nuclear programme.
Industry experts fear that Iran might disrupt its crucial oil exports if the international community punishes the Islamic republic with economic sanctions.
Oil price gains have also been underscored this week by increased expectations of a possible cut in American interest rates.
By Friday in London, a barrel of Brent North Sea crude for delivery in May leapt to $63.02 per barrel, from $60.30 the previous week.
In New York, a barrel of crude for delivery in May jumped to $62.15 dollars per barrel from 57.11 dollars.
GOLD: The price of gold climbed on Thursday to the highest level since the start of this month, lifted by a weakening US dollar and rising crude prices.
Gold prices hit as high as $666.92 on the London Bullion Market, reaching a level which was last seen on March 1, 2006.
Gold prices continued to strengthen ... driven by the weaker dollar and further buoyed by the firmer oil prices, said Barclays Capital analyst Sudakshina Unnikrishnan.
The US Federal Reserve held borrowing costs at 5.25 per cent, but tweaked its policy statement in what some saw as a move to lay the ground for a potential cut in rates in the face of economic weakness.
The Fed statement helped propel the euro to a two-year high of 1.3411 dollars earlier this week. A weaker US dollar makes gold cheaper for buyers using other currencies.
The precious metal is also benefiting from higher oil prices, which increase the risk of inflation. That increases the attractiveness of gold as a defence against the erosion of the value of money.
On the London Bullion Market, gold prices rose to 656.20 dollars per ounce at Friday's late fixing, from 653.20 dollars the previous Friday.
SILVER: Silver prices rose in line with gains by gold and copper.
On the London Bullion Market, silver prices stood at $13.37 per ounce at Friday's late fixing, from $13.07 the previous week.
PALLADIUM AND PLATINUM: Sister metals palladium and platinum followed other precious metals prices higher.
On the London Platinum and Palladium Market, platinum rose to 1,232 per ounce at the late fixing Friday, from 1,217 the previous week.
Palladium firmed to $354 per ounce, from 351 dollars one week earlier.
BASE METALS: Copper and tin prices shone as the complex was boosted by rising Chinese demand and hopes of a possible US rate cut. Some base metals fell on profit-taking towards the end of the week.
Copper hit the best level so far this year, striking $6,865 per ton, which was last seen on December 13, 2006.
The return of Chinese buyers to the market also attracted fresh flows from investors, adding additional upwards pressure on prices, said Calyon analyst Michael Widmer said.
Tin leapt to a new historic high of $14,351 per ton, also lifted by production problems in leading producer Indonesia.
On Friday, three-month copper prices jumped to $6,790.50 per ton on the LME, from $6,490 the previous week.
Three-month aluminium prices eased to $2,770 per ton from $2,775.
Three-month nickel prices slid to $44,495 per ton from $46,800.
Three-month lead prices gained to $1,926 per ton from $1,885.
Three-month zinc prices firmed to $3,226 per ton from $3,220.
Three-month tin prices soared to $14,350 per ton from $13,900 a week earlier.
RUBBER: Rubber prices rose this week owing to unfavourable growing conditions and speculative trade on the Tokyo Rubber exchange which has seen prices trending higher since December 2006.
t's the dry season and the latex is unable to come out so the raw material is in shortage, said Robert Chai, broker with Malaysian firm Intracom.
Also in the Japanese market, speculators are pushing the market higher. Malaysian rubber prices moved higher Friday, with the Malaysian Rubber Board's benchmark SMR20 at 214.60 cents per kilogram compared to 203.65 cents the previous week.
GRAINS AND SOYA: Grains and soya prices gained across the board.
Corn, wheat and soy beans were up on technical recovery ... after the weakness of the previous weeks, said Allendale analyst Joe Victor.
The long term trend is still up for corn and soy beans, because of the demand which is supposed to remain very strong. On the Chicago Board of Trade, the price of wheat for May delivery rose to US$4.6550 per bushel on Friday, from $4.6075 the previous week.
Maize for May delivery increased to $4.10 per bushel on Friday, from $3.995 the previous week.
May-dated soyabean meal -- used in animal feed -- gained to $7.71 on Friday, from $7.5350 the previous week.
On the LIFFE, London's futures exchange, the price of a ton of wheat for November delivery — which was the most traded contract -- rose to 89.50 pounds on Friday, compared with 88.50 the previous week.
COCOA: Cocoa prices hit their best level for about three and a half years.
Cocoa futures were “underpinned by continued speculative buying, as concerns about lower crop prospects in West Africa remain,” said Sucden analyst Michael Davies.
In London, cocoa prices jumped to 1,046 pounds per ton, which was last seen in October 2003, while New York cocoa surged as high as $1,920 per ton, which was last reached in May 2003.
By Friday on the LIFFE, the price of cocoa for May delivery jumped to 1,039 pounds per ton, from £989 a week earlier.
On the New York Board of Trade (NYBOT), the May contract stood at 1,907 dollars per ton on Friday, from $1,792 the previous week.
COFFEE: Coffee prices gained ground.
Coffee futures jumped higher with strong support from speculative buying,Davies added.
By Friday on the LIFFE, Robusta quality for May delivery stood at $1,567 per ton, from 1,509 dollars a week earlier.
On the NYBOT, Arabica for May delivery gained to 113.45 US cents per pound on Friday, from 109.90 cents the previous week.
SUGAR: Sugar prices sweetened. Sugar futures were firmer, supported by trade buying, while some producer selling kept a lid on the market as it remains rangebound, Davies noted.
By Friday on the LIFFE, the price of a ton of white sugar for August delivery increased to $331.30, compared with $329 a week earlier.
On the NYBOT, the price of unrefined sugar for July delivery stood at 10.21 US cents per pound, from 10.20 US cents the previous week.
WOOL: Wool prices unwound as the Australian dollar appreciated by about 1.75 per cent against the US dollar this week, making Australia's wool exports more expensive for buyers abroad using other currencies.
Falls were seen across all micron ranges, but more so in fleece types than skirtings, the Australian Wool Industry Secretariat said.
The Australian wool market finished 1.9pc lower on average, with the Eastern index falling to 9.43 Australian dollars per kilo from $9.62 the previous week.---AFP
