0
LONDON, May 11: The price of oil climbed this week on the back of a suicide bombing in Israel that wiped out a week of progress towards peace in the Middle East, and on a sharp fall in US oil stock levels.
As trading wound down ahead of the weekend, traders were nervously eying Israel to see what retaliation it might take for the deadly blast, with prices seen as rising again if new incursions were launched into Palestinian territories.
Gold prices tiptoed up to new two-year highs as volatility in the value of the dollar buffetted the value of the precious metal.
GOLD: Gold prices touched new two-year highs this week thanks to a weaker dollar, stock market volatility and solid market fundamentals, analysts said.
Prices rose as high as 312.65 at one point. By Friday afternoon, an ounce of gold was fixed in London at 311.15 dollars an ounce, against 310.45 dollars a w eek earlier.
Gold prices have sprung to life in recent weeks in a move analysts attribute to a reduction in producer selling, firmer demand in Japan and a fall in the value of the US currency, which has made dollar-traded gold cheaper to buy.
The general environment for gold remains very positive, said HSBC metals expert Merlin Marr-Johnson.
The dollar continues to weaken, equity markets are very poor, economic uncertainty remains, political uncertainty is still there, he added.
Renewed concerns about global security sparked by a new anthrax scare in the United States and suicide bombings in Israel and Pakistan also revived gold’s safe-haven tag.
Marr-Johnson said that gold prices were likely to continue their recent pattern of gradual rises followed by a period consolidation.
SILVER: Silver prices chased gold higher, rising to $4.6225 an ounce on Friday afternoon from 4.5650 dollars the previous week.
Silver has been dominated by the gold and the dollar moves, said Marr Johnson.
PALLADIUM and PLATINIUM: Platinum group metals (PGM) held steady amid rumours of fresh platinum supplies hitting the market.
By Friday afternoon, platinum prices stood at $522 an ounce from 521 the previous week.
The talk was there have been Russian deliveries on the market, said SG Securities metals expert Stephen Briggs.
It’s a bit mixed, still not that impressive, he added. We are not in a fantastic period for demand.
Palladium prices were flat at $352 an ounce.
BASE METALS: Base metals prices put on a mixed performance amid uncertainty over the outlook for a recovery in company profits, and hence demand for metals.
Demand is not picking up. There had been greater hopes earlier this year that the world economy would rebound, said SG Securities analyst Stephen Briggs. That was always too optimistic the sense of reality has set in, he told AFP.
Things are not very good. The prices of base metals on average have been drifting for six-seven weeks. Most markets are still in large surplus because demand is not picking up significantly, he added.
By Friday, three-month aluminium prices had dropped to $1,365 a ton from $1,371.
Copper prices rose to $1,605 a ton from $1,579 the previous week.
According to Briggs, copper has done a little bit better, because it is going to move back to a better market balance.
Three-month nickel prices rose to $7,070 a ton from 6,860.
Among the other metals, zinc prices fell $97 to $719 a ton, tin rose $70 to $4,200 a ton, while lead was flat at $470 a ton.
OIL: Oil prices rose this week after a new suicide bombing in Israel which cast a shadow over the Middle East peace process, and data showed a shar pre cent fall in US crude oil stock levels.
By late Friday, Brent crude for June delivery was trading at $26.20 a barrel, up 65 cents from a week earlier.
In New York, June-dated light sweet crude futures were quoted at $27.68 a barrel, up $1.3 over the week.
Oil prices fell at the start of the week after Iraq said it would resume exports after a one-month halt in support of the Palestinians.
But they regained ground on fears that a suicide bombing attack near Tel Aviv, which killed 17 people, would result in a fresh cycle of violence in the Middle East.
Prices tend to climb on increased Israeli-Palestinian tensions as traders price in the possibility, albeit remote, that the violence might lead to widespread disruption to Gulf supplies.
Prices were also lifted by a figures from the US energy department which estimated that US crude inventories fell by 5.5 million barrels in the week to May 3, though the news was offset somewhat by a rise of 2.2 million barrels in gasoline inventories.
The rise in oil prices was however capped after Iraq said Thursday it had recommenced shipments of oil, following Baghdad’s decision to turn off the taps on April 8 in retaliation for Israeli incursions into the West Bank.
RUBBER: Rubber prices edged higher as strong rains in the world’s leading production areas disrupted harvesting efforts.
According to Martin Hampson of Symington, activity in the market was quiet with production shortages helping to explain higher prices.
We are post wintering. Previously it was too dry and now it seems the rain has returned, however it is at the wrong time of the day and it is disrupting the tapping, Hampson said.
However, he warned that over the longer term the rain would ultimately be beneficial for the harvest and lead to lower prices.
In Kuala Lumpur, the RSS index rose to 2.660 ringgits per kilo from 2.650 ringgits the previous week.
COCOA: Cocoa prices nudged higher this week, reversing recent declines, as the market awaited details of the mid-season crop.
Analysts at the Refco brokerage said while a deficit in the cocoa market meant the longer-term outlook for prices was positive, uncertainty about the size and condition of the mid-crop remains dominant.
It added that cocoa prices appeared to have bottomed at around 1,440 per ton.
On Liffe, London’s financial futures exchange, the price of a ton of cocoa for July delivery was stable at 1,211 pounds a ton Friday from 1,208 the prev ious week.
On the CSCE, the New York futures market, the July contract advanced to $1,496 a ton from $1,483.
COFFEE: Coffee prices fell sharply as the market awaited details of the Brazilian harvest, which promises to be the most substantial since 1959.
Brazil is by far the biggest world producer, accounting for one third of global production.
The advent of the frost season (in Brazil) is exerting a restraining influence on prices, but other than that sentiment favours a move to 48 (cents per pound), Refco analysts said.
On New York’s CSCE market, Arabica prices for May delivery sagged to 49.50 cents a pound from 50.95 cents the previous week, setting a seven-week low.
On LIFFE, the London financial futures exchange, Robusta quality for July delivery fell to $488 a ton from 525 the previous week.
SUGAR: Sugar prices rose in London thanks to a supply squeeze on the August contract, while prices were steady in New York as the market waited for the expected start of orders from Russia, experts said.
On the CSCE in New York, a pound of unrefined sugar for July delivery slipped to 5.44 cents from 5.46 cents the previous week.
On the LIFFE market in London, a tonne of white sugar for August delivery climbed to $195.5 from $191.8 the previous week.
In broad terms looking forward to the 2002-03 crop suggests an oversupply... but in the near term, for the high quality sugar, there is a relatively tight balance, said Toby Cohen, analyst at the Czarnikow brokerage.
US-based analyst Ann Prendergast at the Refco brokerage said Russia needed to import between 1.5 and 1.6 million tons of sugar before the start of July and the market was waiting for the buying to start.
SOYA: Soya prices forged higher, supported by weekly US soya export figures that matched market expectations, analysts said.
On the Chicago Board of Trade (CBoT), a bushel of soya for May delivery climbed to $4.73 a bushel from $4.59 the previous week.
Soyabean meal used in animal feed for May delivery increased to $162.3 a ton from $159.1.
GRAINS: Grain prices moved in different directions, hitting 17-month lows in London but rising strongly in Chicago on forecasts of poor winter harves ts in the southern United States.
On LIFFE, the London futures market, the price of a ton of wheat for May delivery recoiled to 64.90 pounds from 66.40 pounds.
In contrast, in Chicago a bushel of wheat for May delivery jumped to 266.75 cents from 258.5 cents a week earlier, levels last seen in July 2001.
A bushel of maize in Chicago for May delivery rose to 200.25 cents from 194.5 cents the previous week.
COTTON: Cotton prices stabilised after sharp falls seen the previous week on news US lawmakers had approved a bill granting massive subsidies to US farmers in a move likely to encourage an upswing in production.
In New York, the May contract was steady at 32.20 cents a pound on Thursday from 32.10 cents the previous week.
The Cotton Outlook Index of physical cotton, the average of the world’s lowest prices, eased to 39.30 cents a pound from 39.85 cents the week before.
According to brokers Refco, the farming bill had already been factored into prices by the end of the previous week, giving scope for a modest rally.
WOOL: Wool prices were little changed, with weak demand offsetting a drop in supply.
Market watchers said that large buyers, notably in Japan, had been lured back into the the market thanks to a weaker dollar and stronger yen.
The shortage on the supply side is offsetting the significant drop we have seen on the demand side caused by the weaker global economic environment, the Australian Wool Industries secretariat (AWIS) said.
The Australian Eastern index slipped three cents to 922 cents, while the British Wooltops index was unchanged at 477 pence.—AFP
