LONDON, Nov 24: Oil prices bobbed around in choppy trading this week as world crude producers played a game of output poker, with market shares at stake.

Crude prices hit a two-and-a-half-year low below $17 a barrel as Opec producers struggled to win the support of non-members Norway and Russia for its efforts to bring down supply in line with weak demand.

Elsewhere, the mini-revival in the base metals market fizzled out as support from recent supply cuts waned, with the dim demand outlook still hanging over the market.

Gold prices were hurt by a firmer dollar and reduced demand for safe-haven assets because of a more optimistic outlook for global security.

GOLD: Gold prices moved lower as increased confidence in the global security situation and the stronger dollar kept interest in the precious metal thin.

By Friday afternoon, an ounce of gold stood at $273.1, down from $274.5 a week earlier. The US Thanksgiving holiday and a holiday in Japan further reduced liquidity on an already-quiet market.

The downside bias that we have had for several weeks is because fears over the world security issues are fading, said Kevin Norrish, a metals expert with Barclays Capital in London.

The US dollar is also strengthening, which tends to be bad for gold because it drives up prices in the main buying areas such as Asia,” he told AFP.

SILVER. Silver prices ebbed further this week in lacklustre trading, as the metal shadowed the movement of the gold price, with the stronger dollar taking further shine off the metal.

An ounce of silver was going for $4.0905 on Friday afternoon, from $4.1175 the previous week.

PALLADIUM AND PLATINUM: Prices nestled close to recent lows, though analysts said the downside was limited by a reluctance to sell speculatively in case a sudden surge in industrial buying re-emerges.

By Friday, platinum prices stood at $434 an ounce from $427 a week earlier.

Palladium was quoted at $330 an ounce from $336 the previous week.

They are both being driven by the global economic situation, said Norrish. They have found some good levels of support and there is always in the background this fear about what might happen to Russian shipments, so people are worried about going short at these levels.

He added that the main area of demand came from the automobile sector, which had destocked avidly so far this year.

So their need to buy could increase very sharply if there is any upturn in the economic situation, Norrish said.

BASE METALS: A robust rally in metals prices petered out this week, as the market turned its attention from aggressive supply cuts to the global economic picture, which remains generally glum.

Supply cuts, particularly in copper, have restored some of the sheen to an otherwise tarnished sector, but metals still need the global economy to rediscover its verve in order to enjoy a sustained rebound, analysts said.

A gloomy projection for world growth from the Organization of Economic Cooperation and Development, combined with weak growth data from Germany, indicated that the economic outlook still remains mixed at best.

We have had no further cutbacks, and most funds have covered their short positions, so prices are just drifting back down now, he said.

Copper prices firmed to $1,479 a ton on Friday from $1,474 the previous week.

Three-month aluminium prices fell to $1,350 a ton from $1,365 while nickel slid to $5,130 from 5,380.

Elsewhere in the complex, zinc shed $18 to $798, lead gave up one dollar to $487.

But tin gained, with three-month prices adding $70 to $4,120.

OIL: Oil prices jagged about in volatile mode this week, as a pact between major crude producers aimed at reining in supply came close to fruition, only to be foiled at the last minute by Russia.

London prices plunged to two-and-a-half-year lows below $17 a barrel early in the week, but recovered somewhat as Norway and Mexico signed up to the grand alliance on restricting output being coordinated by the Organization of Petroleum Exporting Countries (Opec).

Norway made its cutback of 100,000-200,000 barrels a day conditional on a reciprocal move from Russia.

But Moscow effectively scuppered the deal by offering only a tiny cutback of 50,000 barrels per day, and prices headed south again on Friday.

By Friday afternoon a barrel of Brent North Sea crude for January delivery was quoted at $17.60 a barrel, up from $17.30 a week earlier.

In New York, January-dated light sweet crude futures fell to $17.50 from $18.37 the previous Friday.

Russia’s move effectively ups the ante and draws out the game of dare pitting Moscow against the 11 nations of Opec.

Russia is digging its heels in, said Andrew Hartree, an oil expert with Royal Bank of Scotland.

It’s a great big game of chicken, and cat and mouse.

RUBBER: Rubber prices fell further this week as Thailand effectively watered down its policy of supporting prices.

In Kuala Lumpur, the RSS index ended Thursday at 2.115 ringgit per kilo from 2.165 ringgit the previous week.

They lowered their price for the intervention for the unsmoked sheet, doing that they have sort of said that they won’t support it any more so people just sold the rubber, said Chris Caiger, an analyst with the Symington brokerage.

SUGAR: Sugar prices gained again as investment funds continued to cover positions in response to the crop damaged caused by Hurricane Michelle recently in Cuba.

On the LIFFE market in London, a tonne of white sugar for March delivery climbed to $240.60 on Thursday from $236 a week earlier. The last time prices were so high was in July.

On the CSCE in New York, a pound of unrefined sugar for March advanced to 7.52 cents from 7.36 cents the previous week.

The funds have continued to buy back their shorts, said Chris Pack, a sugar expert at the Czarnikow brokerage.

The Internation Sugar Organization revised upwards its production deficit forecast in the 2001/02 season (October-September) to 1.667 million tons, this week.

GRAINS: US wheat prices ran up gains this week after forecasts of a fall in temperatures in producer regions raised concerns for the current crop.

But trading was quiet because of Thanksgiving celebrations.

In Chicago, a bushel of wheat for December delivery rose to 287.00 cents from 280.25 the previous week.

A bushel of maize in Chicago for December delivery climbed to 208.75 cents from 206.00 cents a week earlier.

On the LIFFE, the London futures market, the price of a ton of wheat for November delivery firmed to 78.20 pounds from 75.70 pounds the previous week.

COTTON: Cotton prices had a mixed week, but traders reported increased optimism about the outlook for the market.

In New York the December contract slipped to 33.82 cents a pound on Thursday from 34.26 cents a pound the previous week.

The Cotton Outlook Index of physical cotton, the average of the world’s lowest prices, rose to 39 cents from 38.20 a week earlier.

Higher world prices and expectations of good export sales next week are providing underlying support to this market, noted analysts at the Refco brokerage.

WOOL: Australian wool prices were undermined by a stronger Australian dollar, which made exports less attractive to foreign buyers.

The Eastern index fell to 693 cents a kilo from 697 cents the previous week.

The British Wooltops index stuck at 349 pence.—AFP