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LONDON, Nov 3: Crude oil prices broke fresh record highs this week, surging above $96 a barrel for the first time, on worries about tight global energy supplies.
Gold futures soared above $800 an ounce, a feat last achieved in 1980, as the precious metal benefited from a sliding dollar and historically high oil prices.
OIL: The price of oil soared to new dizzy heights after news of tumbling crude reserves in the United States, the world’s biggest energy consumer.
The market was also roiled by geopolitical tensions between Turkey and crude producer Iraq.
New York’s light sweet crude hit a record high of $96.24 per barrel on Thursday. On Friday, Brent North Sea crude struck an historic peak of $91.87.
It is clear that the market has $100 a barrel in its sights and this landmark is set to be breached before year end, said Bank of Ireland analyst Paul Harris.
Traders are concerned about tight global energy supplies heading into the northern hemisphere winter.
Crude futures moved sharply higher on Wednesday after the US Department of Energy revealed that crude inventories had slumped by 3.9 million barrels in the week ending October 26.
The figures shocked the market because analysts’ consensus forecast had been for a modest gain of 400,000 barrels.
But prices ended Thursday with losses as traders took profits -- and tracked plunging global stock markets amid renewed worries over the extent of the US subprime or high-risk mortgage crisis.
However, losses were limited by the falling US currency.
One other factor probably helping crude is the weaker dollar, which makes crude relatively cheaper for foreign buyers, said Sucden analyst Michael Davies.
The dollar has been under considerable pressure because of the weak US economic outlook which has persuaded the Fed to cut rates. The dollar struck a new all-time low against the euro Friday as technical factors offset positive US jobs data, dealers said.
In European trade, the euro rose to a record $1.4528.
Oil prices have jumped by about 50 percent over the past year although adjusted for inflation, they remain below levels reached after the 1979 Iranian revolution.
PRECIOUS METALS: The price of gold passed $800 an ounce for the first time since 1980.
Record oil prices and multi-year lows for the dollar continue to create the perfect bullish recipe for gold, said James Moore, an analyst at TheBullionDesk.com.
Gold futures for December touched $800.80 an ounce in New York on Wednesday.
Prices have jumped by about a third in value over the past year. The precious metal benefits from a weak US currency as it makes commodities that are priced in dollars cheaper for buyers using stronger units.
Higher oil prices spark inflationary concerns, while gold is regarded as a haven in troubled times.
Gold’s all-time record high price stands at $850 an ounce, which was reached on January 21, 1980.
On the London Bullion Market, gold prices gained to $796.50 an ounce at Friday’s late fixing, from $779.15 a week earlier.
Silver prices advanced to $14.32 an ounce at Friday’s late fixing, from $14.07.
On the London Platinum and Palladium Market, platinum prices dropped to $1,439 an ounce at the late fixing Friday, from $1,454 a week earlier.
Palladium prices eased to $369 an ounce, from $370.
BASE METALS: Base metals prices were mixed amid worries that demand for commodities such as copper and aluminium will drop owing to cracks in the US economy.
Base metals will struggle in an environment of falling interest rates, UBS analyst Robin Bhar said.
Central banks are cutting (rates) because economic growth is weakening.
The strong rally in base metals over the past six years came amid rising interest rates which were a sign of strengthening economic growth, he added.
On Friday, the price of copper for delivery in three months fell to $7,465 a ton on the London Metal Exchange, from $7,870 a week earlier.
Three-month aluminium prices increased to $2,590 a ton, from $2,534.
COCOA: Cocoa prices climbed as the market digested factors ranging from a struggling dollar to crop quality and quantity.
COFFEE: Coffee prices rallied in London owing to tight supplies.
We are in the midst of a bottleneck situation, Bouvery analyst Bruno Bouvery said.
SUGAR: Sugar prices resumed their fall owing to expectations of large supplies. Losses were limited, however, by soaring crude oil prices.
Sugar cane is used to produce ethanol, a cheaper biofuel alternative to gasoline or petrol.
By Friday on the LIFFE, the price per tonne of white sugar for December delivery dropped to 282.50 pounds, from 288.10 pounds a week earlier.
On the NYBOT, the price of unrefined sugar for March delivery declined to 9.74 US cents a pound, from 10.47 cents.
GRAINS AND SOYA: Maize prices rose owing to record high oil prices. The commodity is used in the production of fuel which is cheaper than crude.
Next week, we will be following the energy market again, Allendale analyst Joe Victor said.
RUBBER: The price of rubber rose and was set to extend its upward trend owing to tight supplies and the rainy season in Asian producing countries which slows production, dealers said.
WOOL: The price of wool dropped further in major producer Australia as the local currency built on strong gains being won against the US dollar.
A strong Australian dollar makes wool more expensive for buyers using weaker currencies, which in turn hurts demand abroad.—AFP
