By Melisande Rouger and Damien Steffan
LONDON: World oil prices jumped to almost $70 a barrel during a shortened trading week, owing to heightened tensions over Iran’s capture of 15 British sailors ahead of their release.
But the strong gains were later erased as profit-taking set in ahead of a long holiday weekend to mark Easter. Elsewhere, base metals struck record highs on dwindling stockpiles.
Most global financial markets were closing on Thursday in preparation for Easter.
OIL: Oil prices hit a seven-month peak of 69.58 a barrel in London on Monday as a diplomatic crisis between Britain and Iran, the world’s fourth biggest crude producer, sparked fears that the Islamic republic could disrupt exports.
Prices fell later in the week, however, after Iranian President Mahmoud Ahmadinejad allowed 15 British sailors, held by Tehran for almost a fortnight for allegedly entering Iranian waters, to fly home.
Prices were also weighed down by the release of four foreign oil workers abducted last week in Nigeria, Africa’s biggest crude producer.
Nigeria has seen its oil production slashed since last year owing to disruption caused by numerous kidnappings of foreign workers.
Crude futures enjoyed a brief rally towards the end of the week on news that US gasoline, or petrol, reserves plummeted by 5mn barrels last week - far more than market expectations for a drop of just 300,000 barrels.
Motor fuel stocks are being closely watched before the US driving season, which starts next month, when many Americans hit the roads for their summer holidays.
Opec ministers insisted on Thursday that high oil prices are the result of geopolitical tensions, rather than a shortage of supplies.
“The high prices of late are due to the geopolitical situation. It has nothing to do with the fundamentals,” Opec President Mohammed al-Hamili, who doubles as oil minister for the United Arab Emirates, said on the sidelines of an oil industry conference in Paris
By Thursday in London, a barrel of Brent North Sea crude for delivery in May fell to $68.10 a barrel, from 68.64 the previous Friday.
In New York, a barrel of crude for delivery in May dropped to $64.14 a barrel from 66.45.
GOLD: The price of gold struck a one-month high, benefiting from increased tensions over Iran’s detention of the British sailors ahead of their release.
Gold reached $675.79 an ounce – the highest level since March 1.
Investors are piling into gold amid geopolitical concerns, since the yellow metal is seen as a safe store of value in times of political tension and high inflation.
“While the release of the UK hostages may lead to some safe-haven reduction, gold should now find sufficient momentum of its own as speculative players appear more confident at increasing their risk exposure,” said James Moore of TheBullionDesk.com.
Elsewhere, the average price of gold in 2007 is set to break records because of interest from investors amid geopolitical uncertainty, the precious metals consultancy GFMS said on Wednesday.
“It’s looking pretty certain that the record in terms of the annual average, $614.50 back in 1980, is going to fall this year,” GFMS chairman Philip Klapwijk said as the independent research group published its annual Gold Survey.
Since the start of 2007 gold has traded at a average of 650 an ounce.
On the London Bullion Market, gold prices jumped to $673.50 an ounce at Thursday’s late fixing, from $661.75 the previous Friday.
SILVER: Silver prices also hit a one-month high, reaching $13.66 an ounce.
“Silver derived some benefit from stronger base metals, but also tracked the gold moves reasonably closely,” BNP Paribas analyst David Thurtell said.
Silver is both a precious and industrial metal, as it is used by the jewellery and photographic sectors.
On the London Bullion Market, silver prices gained to $13.58 an ounce at Thursday’s late fixing, from $13.35 the previous Friday.
PALLADIUM AND PLATINUM: Platinum ended the week higher, while sister metal palladium eased.
Platinum “edged higher as a result of the break outs in gold and silver,” said Moore of TheBullionDesk.com.
On the London Platinum and Palladium Market, platinum increased to $1,251 an ounce at the late fixing Thursday, from $1,244 the previous Friday.
Palladium dipped to $350.50 an ounce, from 351.75.
BASE METALS: Nickel and lead prices struck all-time highs on weak stockpiles of the base metals, while copper reached the highest level for five months.
Nickel, used to help prevent corrosion, struck a record high of $50,000 a tonne in London trading.
It was the highest reading for nickel since the start of its quotation on the London Metal Exchange (LME) in 1979.
“If there are any worries about slowing US and or global growth then they are not apparent from the performance of the base metals market, at least not over the past few days,” UBS analyst Robin Bhar said.
“Although further gains are possible we suspect prices (at these levels) are unsustainable,” he added.
The price of nickel has surged 50% since the start of 2007 and tripled in one year.
A tonne of lead, meanwhile, struck an historic high of $2,015.
On Thursday, three-month copper prices surged to $7,411 a tonne on the LME, from $6,859.50 the previous Friday.
Three-month aluminium prices rallied to $2,840 a tonne from 2,803.
Three-month nickel prices soared to $49,505 a tonne from 43,795.
Three-month lead prices jumped to $1,990 a tonne from 1,925.
Three-month zinc prices climbed to $3,401 a tonne from 3,285.
Three-month tin prices increased to $14,150 a tonne from 13,650.
GRAINS AND SOYA: Grains prices were mixed, while soya edged ahead.
Grains had tumbled in Chicago the previous week after a US government report said American farmers would plant their highest levels of corn since 1944.
On the Chicago Board of Trade, the price of wheat for May delivery fell to $3.63 a bushel on Thursday, from 3.75 the previous Friday.
Maize for May delivery rose to $4.41 a bushel, from 4.38.
May-dated soyabean meal - used in animal feed - increased to $7.62, from 7.61.
On the Liffe, London’s futures exchange, the price per tonne of wheat for November delivery fell to £87.95, compared with £95.50 for wheat for May.
The May contract had been the most traded contract the previous week.
COCOA: Cocoa prices slid as investors banked profits, one week after reaching the highest levels since 2003 on drought fears in main producer Ivory Coast.
“Prices suffered heavy losses ... under pressure from speculative profit-taking after recent strong gains,” Sucden analyst Michael Davies said. “This technical correction was to be expected.”
By Thursday on the Liffe, the price of cocoa for May delivery dropped to £1,038 a tonne, from £1,056 the previous Friday.
On the New York Board of Trade (NYBOT), the May contract fell to $1,914 a tonne, from 1,951.
SUGAR: Sugar prices slid to a fresh 19-month low of 9.77¢ a pound in New York.
“The sentiment is still bearish because of a big global supply surplus,” Davies said.
By Thursday on the Liffe, the price per tonne of white sugar for August delivery fell to $314.80, compared with $317 the previous Friday.
On the Nybot, the price of unrefined sugar for July delivery decreased to 9.87¢ a pound, from 9.92¢ a week earlier.
COFFEE: Coffee prices rebounded after a weak start.
“Coffee futures finished higher, underpinned by fund buying,” Sucden analyst Davies said.
By Thursday on the Liffe, Robusta quality for May delivery rose to $1,542 a tonne, from $1,513 the previous Friday.
On the Nybot, Arabica for May delivery increased to 111.25¢ per pound, from 109.15¢. - AFPa |
