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.
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.
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 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.
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.
"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 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.
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.
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.
"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.
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.