Oil prices in London leapt to almost 72 dollars a barrel last week, energised by simmering tensions over key crude producers Iran and Nigeria, and weak motor fuel stocks in the United States.
OIL: The price of London Brent North Sea crude hit a nine-month peak as traders fretted over US gasoline or petrol supplies heading into the American driving season which starts this weekend.
London Brent surged to 71.80 dollars per barrel on Thursday - the highest point since August 28, 2006. Meanwhile on Monday, the New York oil contract leapt as high as 67.10 dollars per barrel.
Traders are preoccupied with gasoline ahead of the US peak-demand driving season starting this Memorial Day weekend, when Americans take to the roads for their summer holidays. The market is also concerned that US refiners cannot convert enough crude oil into gasoline to meet demand during the coming months.
The US Department of Energy revealed that stockpiles of gasoline rose 1.5 million barrels in the week ending May 18 - but they remained "well below the lower end of the average range." Price gains last week were underscored by international supply jitters. "Overall, there are more than enough geopolitical worries to support crude futures in the near term," Sucden analyst Michael Davies said.
US President George W. Bush has warned that the United States and its European allies would seek to toughen sanctions on Iran over its defiance of UN demands to rein in its atomic project.
Energy experts argue that Iran, the world's fourth biggest producer of oil, could retaliate with cuts to its crude exports, which in turn could see prices spike. In Nigeria, the sixth-biggest global crude producer, gunmen kidnapped several oil workers in southern Nigeria, sources said Friday.
One diplomat, who asked not to be identified, said the foreigners included four Britons, three US nationals, one South African and possibly a Filipino. The kidnapping is the latest in a long series of abductions to hit the restive Niger Delta since militants stepped up their attacks on the energy sector.
GOLD: Gold prices fell to 651.50 dollars an ounce this week - the lowest point in more than two months. UBS analyst John Reade put the drop down to "a combination of a firm US dollar, weak base metals (prices) and a whiff of risk aversion."
A stronger US currency tends to crimp demand for dollar-denominated commodities, such as gold, as they become more expensive for buyers holding other currencies. On the London Bullion Market, gold dropped to 655.3 dollars an ounce at Friday's late fixing, from 657 dollars a week earlier.
SILVER: Silver prices edged higher, but remained under 13 dollars an ounce. However, silver would likely fetch 15 dollars an ounce later this year, should gold surge past the 700-dollar level, according to comments this week made by Philip Klapwijk, executive chairman of the metal consultancy GFMS.
Silver last tested 15 dollars a year ago. On the London Bullion Market, silver stood at 12.92 dollars an ounce at Friday's late fixing, from 12.87 dollars a week earlier.
PALLADIUM AND PLATINUM: The price of platinum extended losses while its sister white metal palladium rebounded slightly. "Palladium retained its upward momentum ... whereas platinum followed gold's lead and sunk," Barclays Capital analysts said. "Expect another a week or so of choppy gains before palladium prices break decisively higher," they added.
On the London Platinum and Palladium Market, platinum slid to 1,276 dollars an ounce at the late fixing Friday, from 1,308 dollars a week earlier. Palladium climbed to 367 dollars an ounce, from 362 dollars.
BASE METALS: The price of lead hit an historic high, while there were significant falls for copper and nickel. Lead for delivery in three months shot up to an all-time record of 2,216 dollars a tonne Tuesday on the London Metal Exchange. This came as China said it would place a tax of between five and ten percent on lead exported by the Asian nation.
"As a large net exporter to the rest of the world, the 10 percent tax on lead exports will reduce the western world supply and drive up LME prices," BNP Paribas analyst David Thurtell said. Copper meanwhile fell to 6,952 dollars a tonne - the lowest level since the start of April. "In the near term, the oversupply in the Chinese domestic copper market continues to weigh on prices," Barclays Capital analysts said.
On Friday, three-month copper prices recoiled to 7,120 dollars a tonne on the London Metal Exchange, from 7,220 dollars a week earlier. Three-month aluminium prices fell to 2,783 dollars a tonne from 2,815 dollars. Three-month nickel prices dropped to 47,005 dollars a tonne from 49,005 dollars.
Three-month lead prices gained to 2,175 dollars a tonne from 2,020 dollars. Three-month zinc prices declined to 3,600 dollars a tonne from 3,642 dollars. Three-month tin prices stood at 13,950 dollars a tonne from 13,800 dollars.
COCOA: Cocoa prices dropped this week. "London cocoa futures were lower ... falling under pressure from speculative profit-taking, after prices reached four-year highs," Sucden analyst Michael Davies said.
"Cocoa prices had a strong run higher recently, amid uncertainty over West African crops, following severely dry weather conditions there."
By Friday on the Liffe, the price of cocoa for July delivery slipped to 1,057 pounds a tonne, from 1,090 pounds a week earlier. On the New York Board of Trade (NYBOT), the July contract decreased to 1,918 dollars a tonne, from 1,947 dollars.
COFFEE: Coffee prices nudged higher, remaining close to the highest level for about eight years in London on concerns over tight supplies.
The price of Robusta coffee had the previous week surged to 1,735 dollars per tonne - last seen at the start of 1999. "Coffee prices in London draw support from tight supplies from Vietnam and delays of harvesting in Indonesia," Davies said. By Friday on the Liffe, Robusta quality for July delivery edged up to 1,729 dollars a tonne, from 1,728 dollars a week earlier. On the NYBOT, Arabica for July delivery gained to 112.85 US cents a pound, from 111.80 cents.
SUGAR: Sugar prices advanced in London and New York. "London white sugar futures finished a touch higher but (amid) negative sentiment with the prospects of an excessive supply glut this season," Davies said.
By Friday on the Liffe, the price per tonne of white sugar for August delivery rose to 340 dollars, from 334.50 dollars a week earlier. On the NYBOT, the price of unrefined sugar for July delivery jumped to 9.29 US cents a pound, from 8.63 cents.
GRAINS AND SOYA: Grains and soya prices rose.
"The main driver for wheat this week was the dangerously low world stocks and a weather environment that could be weakening the world production," Allendale analyst Joe Victor said.
"There is some very dry weather in Russia and Ukraine, and Western Australia needs rain. Some heavy rains in the US may have damaged the Kansas and Oklahoma wheat," he added. By Friday on the Chicago Board of Trade, the price of maize for July delivery jumped to 3.74 dollars a bushel, from 3.71 dollars a week earlier.
Wheat for July delivery climbed toBrent oil price races towards $72 per barrel in global market 4.95 dollars a bushel, from 4.71 dollars. July-dated soyabean meal - used in animal feed - increased to 8.11 dollars, from 7.93 dollars. On the Liffe, London's futures exchange, the price per tonne of wheat for November delivery increased to 102.75 pounds, from 99.00 pounds the previous week.
RUBBER: The price of rubber rose owing to tight supplies, with the gains also in line with higher prices across the Tokyo Commodity Exchange (TOCOM).
The increase to rubber futures "is mainly due to the shortage of raw material because of the rainy season, which has slowed production," said Robert Chai, a rubber broker with Malaysian firm Intracom. On Friday, the Malaysian Rubber Board's benchmark SMR20 rose to 231.65 US cents per kilogramme, from 225.25 cents the previous week.
WOOL: On the Eastern Index in major producer Australia, the price of wool went above 10.0 Australian dollars a kilo for the first time since April 2003. "Merino fleece wools were in very strong demand, with the biggest gains being made among the fine wools," said the Australian Wool Industry Secretariat. The Australian wool market finished 2.5 percent higher on average this week, with the Eastern Index ending at 10.08 Australian dollars a kilo.
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