Crude oil prices reached their highest levels for nine months last week, before paring gains on news of rising energy stockpiles in the United States. Base metal lead enjoyed yet another record peak as traders fretted over low global reserves.
The price of coffee in London, meanwhile, held close to a nine-year peak amid production problems in key exporter Vietnam.
OIL: Oil prices endured a volatile week after shooting to nine-month peaks on Monday, before ending on a mixed note. The strong gains were won mostly on concerns about tight gasoline supplies in the United States and unrest in Nigeria.
In London, Brent North Sea crude for August delivery reached 72.25 dollars per barrel, a price last seen on August 28, 2006. New York's main oil futures contract, light sweet crude for delivery in July, soared to 69.05 dollars per barrel - the highest point since September 5, 2006.
Prices then began to slip on Wednesday after the US Department of Energy (DoE) said that crude oil stockpiles grew by 6.9 million barrels in the week ended June 15. Most analysts had expected a drop of 50,000 barrels. "Oil prices fell back following a rise in US crude inventories," confirmed Barclays Capital analyst Kevin Norrish.
The DoE meanwhile added that stockpiles of US gasoline jumped by 1.8 million barrels last week, beating the market consensus forecast of 1.2 million barrels.
Traders are closely following the supply of gasoline amid peak demand for motor fuel during the ongoing US summer driving season when Americans throng highways en route to their holiday destinations.
As the trading week neared its close, the market became less concerned therefore, despite possible supply disruptions owing to a national strike in Nigeria - the world's sixth biggest crude exporter. Nigeria's general strike entered its third day Friday after overnight talks between labour unions and government ended in deadlock.
Brent North Sea crude for August delivery nonetheless slid to 70.96 dollars a barrel on Friday, from 71.84 dollars a barrel a week earlier. New York's main oil futures contract, light sweet crude for delivery in August, firmed to 69.20 dollars a barrel however, from 67.70 dollars a barrel.
GOLD: The price of gold eased, tracking fluctuations in the US dollar. "Amid uncertain sentiment, gold prices have taken their cue from dollar movements," Barclays Capital analysts said.
A strengthening dollar makes dollar-denominated commodities, such as gold, more expensive for buyers holding weaker currencies. On the London Bullion Market, gold dropped to 652.85 dollars an ounce at Friday's late fixing, from 653.10 dollars a week earlier.
SILVER: Silver prices advanced. "Silver held comfortably above 13 dollars, despite selling pressure," said James Moore, analyst at specialist metals website TheBullionDesk.com. Silver is a precious and an industrial metal, used to make jewellery and by the photographic and dentistry sector. On the London Bullion Market, silver gained to 13.15 dollars an ounce at Friday's late fixing, from 13.06 dollars a week earlier.
PALLADIUM AND PLATINUM: The sister metals both shot higher, with palladium striking a one-month high amid the threat of industrial action in key producer South Africa. Anglo Platinum, the world's biggest platinum producer, has failed thus far to meet wage demands of union leaders there.
"With wage negotiation in South Africa still ongoing, the likelihood of strike action is still very high," Moore added. On the London Platinum and Palladium Market, platinum rose to 1,301 dollars an ounce at the late fixing Friday, from 1,278 dollars a week earlier. Palladium climbed to 375 dollars an ounce, from 367 dollars.
BASE METALS: Base metal prices had a mixed week, but lead smashed another historic high. "Lead was lifted by low inventories (and) pushed higher by fund buying," said Sucden analyst Michael Davies.
Lead, which is used extensively for batteries and in the automotive industry, hit a record 2,550 dollars per tonne on Thursday. The prices of nickel, aluminium, zinc and tin declined as many traders began to question the strength of demand from economic powerhouse China.
"Many suggest that demand from China is not as strong as it was at the start of the year, putting more pressure on the market," Davies added. On Friday, the price of copper for delivery in three months rallied to 7,470 dollars a tonne on the London Metal Exchange, from 7,381 dollars a week earlier.
Three-month aluminium prices edged lower to 2,709 dollars a tonne, from 2,716 dollars. Three-month nickel prices slumped to 37,550 dollars a tonne, from 40,900 dollars. Three-month lead prices rocketed to 2,505 dollars a tonne, from 2,353 dollars. Three-month zinc prices declined to 3,524 dollars a tonne, from 3,685 dollars. Three-month tin prices weakened to 13,875 dollars a tonne, from 14,100 dollars.
GRAINS AND SOYA: Grains and soya prices beat a retreat, with wheat falling away from a recent eleven-year pinnacle. Wheat had struck 6.07 dollars a bushel in Chicago last week - the highest level since 1996 - as producers Ukraine and Russia endured dry weather which hampered output.
Traders said the market would be guided by prevailing weather conditions - and forecasts - in major producing nations. "Next week, the focus will stay very much on short term weather forecasts," added Allendale analyst Joe Victor.
By Friday on the Chicago Board of Trade, the price of maize for July delivery sank to 3.73 dollars a bushel, from 4.19 dollars a week earlier. Wheat for July delivery fell to 5.99 dollars a bushel, from 6.07 dollars.
July-dated soyabean meal - used in animal feed - decreased to 8.03 dollars, from 8.47 dollars. On the Liffe, London's futures exchange, the price per tonne of wheat for November delivery dipped to 112 pounds, from 112.75 pounds.
COFFEE: Coffee prices were robust, trading around their highest level since 1998 in London. "The market remains well supported by tight Robusta supply from Vietnam and rising demand," said Davies at the Sucden brokerage.
On the Liffe, London's futures exchange, Robusta prices had leapt to 1,940 dollars a tonne on June 12 - which was last seen nine years ago. Coffee prices in London have surged amid market worries over lower exports from Vietnam, which is the world's second-biggest coffee producer after Brazil.
By Friday on the Liffe, Robusta quality for September delivery leapt to 1,915 dollars a tonne, from 1,853 dollars a week for the July contract one week earlier. On the NYBOT, Arabica for September delivery added to 115.85 US cents a pound, from 115.40 cents.
COCOA: Cocoa prices drifted lower as traders took profits from gains made the previous week. However, prices were supported by market concerns over number one producer Ivory Coast, where unusually hot and dry weather at the start of the year has sparked market fears of a drop in production.
By Friday on the Liffe, the price of cocoa for September delivery dipped to 1,060 pounds a tonne, compared to 1,077 pounds a week earlier when the most traded contract was for the month of July. On the New York Board of Trade (NYBOT), the September contract slipped to 1,950 dollars a tonne, compared to 1,952 dollars for the July contract.
SUGAR: Sugar prices rebounded from recent losses. "London white sugar futures gained ground in light volume, underpinned by trade and speculative short covering," added Sucden's Davies. In previous weeks, prices had been weighed down by an abundance of sugar in the market, according to traders.
By Friday on the Liffe, the price per tonne of white sugar for August delivery advanced to 319.40 dollars, from 305.60 dollars a week earlier. On the NYBOT, the price of unrefined sugar for July delivery jumped to 9.15 US cents a pound, from 8.53 cents.
RUBBER: The price of rubber fell as production rose on improving weather conditions, traders said. "The weather is getting better - (with) less rain - and production has increased," said an official from a rubber company who wished to remain anonymous. On Friday, the Malaysian Rubber Board's benchmark SMR20 declined to 211.85 US cents per kilogramme, compared with 214.65 the previous week.
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