World oil prices dived last week as traders banked profits owing to a rebounding dollar and a sharp rise in US crude inventories. The stronger US unit weighed on all dollar-denominated commodities as they became more expensive for buyers. Commodity markets shut Thursday ahead of the long Easter weekend, with traders returning to their desks on Tuesday. The Commodities Research Bureau's index of 17 commodities dropped to 305.81 points on Thursday from 320.15 points the previous Friday.
GOLD: Gold prices slumped by as much as ten dollars to reach a one-month low on Thursday. "The sharp strengthening of the US dollar has led to marked long liquidation across precious metals," Barclays Capital analyst Kamal Naqvi said. The dollar rallied against major currencies after the US Federal Reserve raised its key interest rate by a quarter point to 2.75 percent on Wednesday.
It also racked up gains as the Fed's tough new message on monetary policy boosted expectations of further US interest rate hikes in the short term.
On the London Bullion Market, gold prices dropped to 425.15 dollars per ounce at the late fixing on Thursday from 437.15 dollars the previous Friday.
SILVER: Silver prices fell in the wake of sister metal gold. The precious metal dropped under 7.0 dollars an ounce, reaching its lowest point since the start of February on Thursday, also due to a lack of volumes as traders began their long Easter holiday period. "The lack of liquidity in European trade led silver lower," said analyst James Moore of specialist website TheBullionDesk.com.
Silver slipped to 6.915 dollars per ounce at the late fixing Thursday from 7.335 dollars the previous Friday.
PLATINUM AND PALLADIUM: Platinum and palladium prices followed other precious metals lower as the dollar strengthened. "Platinum and palladium weakened in line with other metals as higher US interest rates and a firmer dollar took the shine off the metals," UBS analyst John Reade said.
By Thursday, platinum prices fell to 859 dollars per ounce on the London Platinum and Palladium Market on Thursday from 873 dollars the previous Friday.
Palladium prices decreased to 195 dollars per ounce on Thursday from 200 dollars the previous Friday.
BASE METALS: Base metals prices fell on speculative selling as traders banked profits made from the resurgent greenback. The lower prices were "driven by long liquidation by hedge funds, inspired by currency moves, rising (US) interest rates, falls in mining equities and the fact that base metals are already trading near historical highs", Barclays Capital analyst Ingrid Sternby said. "The sharp correction in the euro/dollar encouraged profit taking."
By Thursday, three-month copper prices fell to 3,224 dollars per tonne on the London Metal Exchange Thursday from 3,257 dollars the previous Friday.
Three-month aluminium prices fell to 1,945.50 dollars per tonne Thursday from 1,972 dollars the previous Friday.
Three-month nickel prices dropped to 15,875 dollars per tonne on Thursday from 15,900 dollars the previous Friday.
Three-month lead prices were unchanged at 955 dollars per tonne Thursday from the previous Friday.
Three-month zinc prices declined to 1,340.50 dollars per tonne Thursday from 1,370 dollars the previous Friday.
Three-month tin prices decreased to 8,155 dollars per tonne Thursday from 8,455 dollars the previous Friday.
OIL: Oil prices fell sharply because of a rebounding US dollar, profit taking and a large rise in US crude inventories. World oil prices had soared to fresh record high levels the previous week, with New York's main crude contract jumping as high as 57.60 dollars per barrel and London's Brent North Sea crude peaking at 56.15 dollars because of supply worries amid robust global demand.
But prices began tumbling Wednesday after the US Department of Energy said the country's crude oil inventories in the week to March 18 rose 4.1 million barrels to 309.3 million - double the increase that analysts expected.
Gasoline reserves dropped for the third consecutive week by 4.1 million barrels to 217.3 million - but remained 7.5 percent higher than one year ago.
Prices plunged 2.22 dollars to close at a two-week low of 53.81 dollars a barrel in New York Wednesday.
"The figures showed that crude oil supplies are ample and with gasoline stocks still at multi-year highs, despite the fall, the picture is of a well supplied market place," Sucden analysts said.
Speculative selling set in also as the US unit strengthened and amid prospects that the Organisation of Petroleum Exporting Countries might raise its production ceiling from the current 27.5 million barrels per day.
Prospects of a strike by oil workers in Nigeria, the world's ninth-biggest oil producer, offered prices some support around the middle of the week.
Oil futures then briefly rebounded Thursday as news of a fatal blast at BP's biggest oil refinery in Texas, southern United States, where at least 15 people were reported to have been killed with 70 injured.
The site, consisting of 30 refinery units and large storage tanks, produces 30 percent of BP's North American oil and three percent of the entire US supply, producing vast quantities of gasoline.
By Thursday New York's light sweet crude for May delivery plunged to 54.31 dollars per barrel from 57.24 dollars the previous Friday.
In London, Brent North Sea crude for May delivery dropped to 53.42 dollars Thursday from 55.40 dollars the previous Friday.
RUBBER: Rubber prices steadied this week nearing the end of the traditional low harvest season in Asia. "It's been quiet, it's going to remain for another two weeks like this, until the rains come in Thailand and Malaysia, which typically occur in mid-April," one London trader said.
In Osaka, the RSS 3 April contract stood at 141 US cents on Thursday, unchanged from the previous Friday.
Singapore's RSS 3 April contract stood at 132 US cents on Thursday, unchanged also from the previous Friday.
COCOA: Cocoa futures tumbled as speculators banked profits in the wake of the dollar's rebound. A tonne of cocoa had reached as high as 1,850 dollars in New York on March 17, the highest point for nearly two years on tensions in major producer Ivory Coast. "Essentially the market was overdone at 1,850 dollars... especially since bearish fundamentals were easing and the Ivory Coast violence, which had precipitated the move, failed to materialise," Refco analyst Ann Prendergast said.
"In this environment, it took only a sharp rise in the dollar to trigger massive selling."
On Liffe, London's futures exchange, the price of cocoa for May delivery dropped to 865 pounds per tonne on Thursday from 985 pounds the previous Friday.
On the CSCE, the New York futures market, the May contract plunged to 1,569 dollars per tonne on Thursday, from 1,840 dollars the previous Friday.
COFFEE: Coffee prices lost ground as the dollar's rebound offset forecasts of a smaller crop in leading producer Brazil. "Fund liquidation is the superficial explanation (for the price falls), but it's not sure whether this was the catalyst the market had been waiting for to take it off its escalating highs or whether this is a pull-back leading to further advances," Prendergast said.
Coffee futures had shot to 1,125 dollars in London on March 11, the highest level since February 2000, and to 139.50 cents in New York - a peak not reached for five years.
"Trade sources note that there is no immediate term supply shortage, though one is expected to develop after the harvest of the smaller 2005/06 Brazil crop in the summer," Prendergast said.
On Liffe, Robusta quality for May delivery shrank to 950 dollars per tonne on Thursday from 995 dollars the previous Friday.
On New York's CSCE market, Arabica for May delivery fell to 124.90 cents per pound on Thursday, from 131.90 cents the previous Friday.
SUGAR: Sugar futures declined to the lowest level for four months in New York and three months in London, hit by strong selling by speculative funds. Prices dropped to 8.62 cents a pound in New York on Wednesday, the lowest point since November 10, 2004 and in London they hit as low 250.50 dollars per tonne.
Sugar joined "a broad-based commodity sell-off", Prendergast said.
Prices had risen to the highest level for three and a half years in London and for three and a half months in New York at the end of January on strong Pakistan demand, but have fallen since on profit taking.
By Friday on Liffe, the price of a tonne of white sugar for May delivery slid to 255 dollars on Thursday from 261 dollars the previous Friday.
On the CSCE in New York, a pound of unrefined sugar for May delivery slipped to 8.72 cents on Thursday from 9.06 cents the previous Friday.
GRAINS AND SOYA: Soya and grains prices dropped after the dollar's rally. "They all fell," Fimat analyst Dan Cekander said. The higher greenback "encouraged certain traders to exit the markets". On Liffe, wheat for May delivery eased to 71.20 pounds per tonne on Thursday from 71.50 pounds the previous week.
In Chicago, the price of wheat for May delivery recoiled to 337.50 cents per bushel on Thursday from 361.50 cents the previous Friday.
Maize for May delivery dropped to 209.50 cents per bushel on Thursday from 221 cents the previous Friday.
Soyabeans for May delivery decreased to 624.50 cents per bushel on Thursday from 655.25 cents the previous Friday.
May-dated soyabean meal - used in animal feed - stood at 186 dollars per tonne on Thursday compared with 193.10 dollars the previous Friday.
COTTON: Cotton prices fell on speculative selling. New York's May contract dropped to 50.35 cents per pound by Thursday from 51.50 cents the previous Friday. The Cotton Outlook Index of physical cotton declined to 55.88 cents on Wednesday from 57.25 cents the previous Friday.
WOOL: Wool prices rose as the US dollar strengthened against its Australian counterpart and amid forecasts of a fall in world production. "Any ongoing boost in the value of the US dollar should be favourable to Australian wool prices," the Australian Wool Industries Secretariat said. A stronger US dollar makes Australia's wool exports less expensive abroad.
Official Australian estimates for 2004/05 production meanwhile saw a downwards revision of 10 million kilogrammes to 477 million.
The Australian Eastern index rose to 7.28 Australian dollars per kilo on Wednesday from 7.23 dollars the previous Thursday.
The British Wooltops index stood at 390 pence on Thursday, from 388 pence a week earlier.