World oil prices jumped higher for the second week in a row, energised by falling heating fuel stocks and colder winter weather in the United States. The Commodities Research Bureau's index of 17 commodities rose to 297.90 points on Friday at about 1700 GMT, from 294.85 points a week ago.
The index had breached 300 points on Thursday for the first time since January 3.
"Precious metals such as gold and silver put in a positive performance across the complex, with prices largely tracking movements in the dollar market and being supported by the firmer oil prices," said Barclays Capital analysts. Gold prices climbed in London to 661.46 dollars per ounce on Thursday, which was last seen in July 2006.
The precious metal benefits from higher oil prices because they increase the risk of inflation, which in turn increases the attractiveness of gold as a defence against the erosion of the value of money. On the London Bullion Market, gold prices firmed to 645.70 dollars per ounce at Friday's late fixing, from 645.50 dollars the previous Friday.
Silver hit 13.78 dollars per ounce on Thursday, the best level since December 15, before pulling back on Friday after the US currency recovered. On the London Bullion Market, silver prices rose to 13.66 dollars per ounce at Friday's late fixing, from 13.22 dollars the previous week.
Copper prices suffered from news of rising stockpiles in London. Nickel tumbled from its record high struck the previous week. Zinc and tin also slid from their recent peaks. On Friday, three-month copper prices sank to 5,500 dollars per tonne on the London Metal Exchange from 5,750 dollars the previous week. Three-month aluminium prices declined to 2,700 dollars per tonne from 2,777 dollars.
Three-month nickel prices fell to 37,505 dollars per tonne from 37,800 dollars. Three-month lead prices sagged to 1,660 dollars per tonne from 1,685 dollars. Three-month zinc prices plunged to 3,270 dollars per tonne from 3,601.50 dollars. Three-month tin prices dropped to 11,825 dollars per tonne from 11,950 dollars a week earlier.
"Prices have now recovered more than 70 percent of the losses incurred since the start of the year, and there is still potential for further upside in our view," said Barclays Capital analyst Kevin Norrish. "The flow of oil data was overall supportive this week, with the latest set of US weekly oil statistics indicating that US oil demand has rebounded strongly in January from a weak December."
Prices found further support as Opec's planned February production cut took effect, dealers said. The Organisation of Petroleum Exporting Countries, meeting in Nigeria in December, had decided to cut production by 500,000 barrels per day (bpd) from February 1, following a cut of 1.2 million bpd in November. Crude prices fell below 50 dollars a barrel on January 18 in New York, hitting their lowest levels since May 2005 owing to a sharp increase in US crude stocks and a relatively mild winter across the northern hemisphere.
However in recent weeks, heating fuel demand has been rising as freezing cold weather gripped the north-east United States, the biggest consumer of heating oil in the world, raising concerns this could deplete stockpiles. By Friday in New York, a barrel of crude for delivery in March surged to 57.45 dollars per barrel from 55.25 dollars the previous week. In London, a barrel of Brent North Sea crude for delivery in March jumped to 56.97 dollars per barrel, from 55.15 dollars.
On the Liffe, London's futures exchange, the price of cocoa for March delivery rose to 901 pounds per tonne on Friday, from 873 pounds a week earlier. On the New York Board of Trade (NYBOT), the March contract increased to 1,650 dollars per tonne on Friday, from 1,581 dollars the previous week.
In Wednesday's trade, Robusta coffee hit 1,663 dollars per tonne - last seen February 1999. On Liffe, Robusta quality for March delivery stood at 1,601 dollars per tonne on Friday, from 1,572 dollars a week earlier. On NYBOT, Arabica for March delivery stood at 118.20 cents per pound on Friday, from 116.05 cents the previous week.
By Friday on Liffe, the price of a tonne of white sugar for March delivery rose to 341.50 dollars at about 1600 GMT, compared with 335.40 dollars a week earlier. On NYBOT, the price of unrefined sugar for March delivery dipped to 10.57 US cents per pound, from 10.60 US cents the previous week.
On the Chicago Board of Trade, the price of wheat for March delivery retreated to 4.57 US dollars per bushel on Friday, from 4.66 dollars the previous week. Maize for March delivery eased to 3.95 dollars per bushel on Friday, from 4.05 dollars the previous week.
March-dated soyabean meal - used in animal feed - rose to 7.24 dollars on Friday, from 7.13 dollars the previous week. On the Liffe, the price of a tonne of wheat for March delivery stood at 94.50 pounds, from 94.10 pounds the previous week.