LONDON: Commodity markets diverged this week as metals benefitted from better-than-expected US jobs data while oil futures were hit by easing supply strains.
: Crude futures slid on easing concerns over supply disruptions in Iraq and Libya, but losses were capped by evidence of healthy demand in the world's largest oil consumer, the United States, traders said.
Singapore's United Overseas Bank said in a client note that "supply fears begin to ease after Libya declared an end to an oil crisis that has slashed exports".
Crude prices began sliding this week on Wednesday after Libya's interim Prime Minister Abdullah al-Thani declared that authorities had regained control of export terminals blockaded by rebels.
Production in Libya, a member of the OPEC oil cartel, has been severely limited for a year after rebels last summer blockaded terminals as part of a campaign to restore autonomy in the country's eastern region.
Its output currently stands at some 320,000 barrels per day, about a fifth of its normal production.
"Libya has seen promising progress this week in regards to recovering much of its halted oil export capacity," said Dorian Lucas, an analyst at energy consultancy Inenco. Concerns over a possible supply disruption due to Iraq's security crisis have also eased.
Islamist militants have overrun swathes of territory in Iraq in a lightning offensive since June 9, but have so far not yet directly threatened the key oil-producing region in the country's south.
Crude price losses have been capped, however, by a bigger-than-expected drop in US inventories.
The US Energy Information Administration on Wednesday said American commercial crude inventories fell 3.2 million barrels last week, almost twice the amount predicted by analysts.
Meanwhile the Labor Department on Thursday said the US economy added 288,000 jobs in June, well above expectations of 215,000, cutting the unemployment rate to 6.1 percent from 6.3 percent in May.
The US is the world's top oil consumer so any indication of its economic strength is closely watched by investors.
Also supporting prices was news that "Asia's industrial powerhouses, China and Japan, both saw manufacturing activity expand further in June", he added.
By Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in August slid to $110.87 a barrel from $113.18 one week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for August dropped to $103.90 a barrel from $105.55.
Palladium shines:
PRECIOUS METALS: Gold hit three-month highs before the haven investment lost some of its gains because of the positive US jobs data.
Palladium, meanwhile, hit a fresh 13-year high at $866.85 an ounce on solid demand for the metal, which is used to make catalytic converters for vehicles, and strike action in South Africa.
Striking South African engineering and metals workers have rejected an improved wage offer to end the country's largest-ever strike, firms said Friday, as the stoppage spilled over to the vital auto sector.
Representatives for the roughly 200,000 workers who downed tools on July 1 rejected a 10 percent pay increase for some employees this year and nine and eight percent increase in 2015 and 2016, the industry federation SEIFSA said.
The strike has hit an estimated 10,500 companies across South Africa worth an aggregate four percent of economic output, and threatens to push the country further toward recession.
The economy shrank in the first quarter amid a five-month-long platinum strike that was only resolved last week.
By Friday on the London Bullion Market, the price of gold rose to $1,319.25 an ounce from $1,317.50 a week earlier.
Silver increased to $21.12 an ounce from $21.04. On the London Platinum and Palladium Market, platinum climbed to $1,503 an ounce from $1,479. Palladium advanced to $866 an ounce from $839.
BASE METALS: Prices rose across the board, helped by positive data, while zinc hit a near three-year high at $2,270.25 a tonne thanks to supply strains affecting the industrial metal.
The US jobs data "noticeably brightens the economic picture in the US following what can only be described as a fairly lacklustre first quarter", analysts at Commerzbank said in a note to clients.
"Because the US is the world's second-largest consumer of metals, this should also be reflected in higher metal prices in the medium term." Base metals were supported also by economic data from key importer China.
Chinese manufacturing activity expanded at its fastest pace this year in June, an official survey showed Tuesday, in a sign that Beijing's attempts to tackle slowing growth in the world's number two economy are gaining traction.
The official purchasing managers' index (PMI) hit 51.0 last month, the National Bureau of Statistics said this week. The figure is up from 50.8 in May and the best since a similar reading of 51.0 in December.
The index tracks manufacturing activity in China's factories and workshops and is a closely watched indicator of the health of the economy. A reading above 50 indicates growth, while anything below points to contraction.
By Friday on the London Metal Exchange, copper for delivery in three months jumped to $7,140 a tonne from $6,956 a week earlier.
Three-month aluminium grew to $1,921 tonne from $1,886.
Three-month lead climbed to $2,180 a tonne from $2,166.
Three-month tin rallied to $22,790 a tonne from $22,315.
Three-month nickel advanced to $19,500 a tonne from $18,825.
Three-month zinc increased to $2,236 a tonne from $2,187.
Cocoa stable, Sugar sours:
COCOA: Prices steadied amid signs of a healthy crop in Ivory Coast, the world's biggest producer of the key chocolate ingredient.
"The weather has been favourable and midcrop harvest results have been positive and imply a good to very good mid crop in west Africa," said Jack Scoville, analyst at brokers Price Futures Group.
Friday on LIFFE, London's futures exchange, cocoa for delivery in September eased to £1,919 a tonne from £1,924 a week earlier.
On the ICE Futures US exchange, cocoa for September dipped to $3,100 a tonne from $3,108 a week earlier.
COFFEE: Prices diverged, with Robusta-quality coffee higher on dry weather in Vietnam, while the price of Arabica beans fell owing to a large crop in top producer Brazil.
"Vietnamese growing conditions have been drier than normal and it is possible that production for next year will be impacted," said Scoville.
He added: "Brazil production has been high so far this season as the drought has created some very good harvest conditions."
On ICE Futures US, Arabica for delivery in September slipped to 171.80 US cents a pound from 181.30 cents a week earlier.
On LIFFE, Robusta for September rose to $2,059 a tonne from $2,036 a week earlier.
SUGAR: Futures slid further on abundant supplies.
By Friday on LIFFE, the price of a tonne of white sugar for delivery in October stood at $469.40 compared with $483.10 for the August contract a week earlier.
On ICE Futures US, the price of unrefined sugar for October dropped to 17.81 US cents a pound from 18.55 US cents a week earlier.
RUBBER: Prices in Kuala Lumpur fell as the Malaysian ringgit strengthened against the US dollar and due to concerns about demand in top rubber consumer China.
The Malaysian Rubber Board's benchmark SMR20 dropped to 174.35 US cents a kilo from 178.65 cents a week earlier.
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