The price of New York oil surged last week to a historic peak above 78 dollars per barrel, propelled by falling crude reserves in key energy consumer the United States, analysts said.
Meanwhile, commodity traders kept a keen eye on the state of global financial markets this week, as equities tumbled on fears that the troubled US housing market could spread to the global economy. "Concerns about sub-prime woes were still very much at the forefront of many people's minds," noted analysts at the Sucden brokerage in London.
"The markets remain volatile as we head towards the end of a tricky trading week."
OIL: The price of New York oil soared to a record high of 78.77 dollars a barrel, as plunging US crude inventories stoked fears about stretched energy supplies around the world, traders said.
New York's light sweet crude leapt to the all-time high point after the US Department of Energy said that US crude stocks sank by 6.5 million barrels in the week ended July 27. That was far heavier than market expectations for a drop of 1.13 million barrels.
"The US statistics that came out surprised a lot of people in terms of the extent of the draw (drop)," said BNP Paribas analyst Harry Tchilinguirian. "It surpassed people's expectations," he added. The news had a big impact on the global oil market because the United States is the world's biggest consumer of energy.
After the new record, the head of the International Energy Agency urged the OPEC oil cartel to increase production. "Oil prices are very high because they are reacting to the announcement of American stocks, which have fallen a lot more than expected," Claude Mandil, the head of the energy watchdog, told AFP.
OPEC has resisted previous IEA appeals to pump more crude to keep oil prices down, arguing that higher prices reflect not supply tightness but rather refining problems in the United States and geopolitical tensions.
The next output meeting of the Organisation of the Petroleum Exporting Countries is scheduled for September 11 in Vienna.
Wednesday's new US record smashed the previous all-time high of 78.40 that was set on July 13, 2006, amid violence between Israel and Lebanon in the oil-rich Middle East.
It also beat London Brent's historic high point of 78.64 dollars per barrel, which was set on August 7, 2006, after a pipeline spill forced British firm BP to close output from Prudhoe Bay, the biggest oil field in the United States.
According to Tchilinguirian, oil prices could head even higher if global supplies face new disruption.
"Any further (price) increase could be from some sort of escalating geopolitical tension or supply disruption centred around key producers, like the situation last year when we had the crisis in Lebanon."
By Friday, Brent North Sea crude for September delivery eased to 75.57 dollars a barrel on Friday, compared with 75.99 dollars a barrel a week earlier. New York's main oil futures contract, light sweet crude for delivery in September, gained to 76.67 dollars a barrel, from 76.11 dollars a barrel.
BASE METALS: Base metals prices were a mixed bag this week as the complex was roiled by uncertainty across global stock markets. "Base metals continued to post a mixed performance amid choppy trading conditions and concerns on the wider financial markets," Barclays Capital analysts said.
On Friday, the price of copper for delivery in three months decreased to 7,785 dollars a tonne on the London Metal Exchange, from 7,795 dollars a week earlier. -- Three-month aluminium prices recoiled to 2,675 dollars a tonne, from 2,744 dollars.
-- Three-month nickel prices slid to 28,600 dollars a tonne, from 30,899 dollars.
-- Three-month lead prices rose to 3,300 dollars a tonne, from 3,035 dollars.
-- Three-month zinc prices declined to 3,410 dollars a tonne, from 3,470 dollars.
-- Three-month tin prices advanced to 16,237 dollars a tonne, from 15,499 dollars.
GOLD: Gold prices firmed amid slim pickings across the precious metals sector.
"Summer holiday mood hit the precious metals as the complex saw narrow range trade," said analyst James Moore at metals website TheBullionDesk.com. Soaring crude oil prices traditionally increase the price of gold as investors seek to safeguard their cash from inflationary pressures.
On the London Bullion Market, gold edged up to 670.50 dollars an ounce at Friday's late fixing, from 660.50 dollars a week earlier.
SILVER: Silver prices nudged higher in line with sister metal gold. On the London Bullion Market, silver rose to 12.96 dollars an ounce at Friday's late fixing, from 12.75 dollars a week earlier.
PALLADIUM AND PLATINUM: Palladium and platinum prices eked out slim gains amid the persistent strike threat in South Africa. "Good (platinum) demand has been seen in Asia ... and for the moment traders remain cautious buyers as wage negotiations in South Africa still have to potential to result in strike action," Moore added.
On the London Platinum and Palladium Market, platinum firmed to 1,286 dollars an ounce at the late fixing Friday, from 1,284 dollars a week earlier. Palladium increased marginally to 364 dollars an ounce, from 362 dollars.
COCOA: Cocoa prices fell as supply concerns eased. "Reports of a good upcoming main crop from West Africa weighs," said Sucden analysts. By Friday on the Liffe, London's futures exchange, the price of cocoa for September delivery dropped to 991 pounds a tonne, from 1,018 pounds a week earlier.
On the New York Board of Trade (NYBOT), the September contract fell to 1,914 dollars a tonne, from 1,937 dollars the previous Friday.
COFFEE: Coffee prices rose on speculative buying. By Friday on the Liffe, Robusta quality for September delivery rose to 1,836 dollars a tonne, from 1,784 dollars one week earlier. On the NYBOT, Arabica for September delivery advanced to 117.70 US cents a pound, from 112.55 cents.
GRAINS AND SOYA: Grains and soya prices rose, while wheat steadied. "The (weather) forecasts present again a lot of rain opportunities and that might be again a negative factor" for prices next week, said AG Edwards analyst Bill Nelson.
By Friday on the Chicago Board of Trade, the price of maize for September delivery rose to 3.26 dollars a bushel, from 3.21 dollars a week earlier. Wheat for September delivery decreased to 6.49 dollars a bushel, from 6.53 dollars.
August-dated soyabean meal - used in animal feed - gained to 8.36 dollars, from 8.15 dollars. On the Liffe, the price per tonne of wheat for November delivery firmed to 133.75 pounds, from 132 pounds.
SUGAR: Sugar prices were mixed. Fimat analyst James Cassidy said traders were torn between supportive short-term factors, such as late harvest in key producer Brazil, and negative long-term factors like the prospect of a global surplus this year.
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