Global commodities experienced volatile trade this week on worries over Ukraine, with oil spiking before sliding on receding tensions, while gold sparkled as investors sought shelter from the crisis. Sentiment was also hit by demand concerns after more weak data from the Asian powerhouse China, a top consumer of raw materials.
Elsewhere, drought conditions in Brazil sent coffee and sugar prices soaring to major peaks on supply concerns. Traders drew some strength on Friday from better-than-expected US non-farm payrolls data in the world's biggest economy.
Crude futures retreated as fears of an immediate armed conflict in Ukraine receded, but analysts said the presence of Russian-backed troops in the Crimean peninsula continued to support prices. Russia faces sanctions from the US and Europeans which potentially could wreak turmoil in markets - especially as Russia is a crucial global energy producer and exporter of natural gas to Western Europe.
More than 70 percent of its gas and oil exports to Europe pass through Ukraine. Markets were also hit on Wednesday by fresh concerns over growth in China, which is the world's second biggest crude consuming nation. China's National People's Congress began its annual meeting on Wednesday, with Premier Li Keqiang saying the government was targeting 7.5 growth in 2014, unchanged from last year's forecast.
The figure is below the 7.7 percent recorded in 2013 and 2012, and is the lowest growth rate since 1999. The market took another knock on Wednesday after the US Department of Energy said commercial crude-oil inventories rose by 1.4 million barrels in the week ending February 28. That was more than expectations of a 1.0 million barrel gain, indicating demand that was weaker than expected for the world's largest crude-oil consumer.
By Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in April dipped to $108.54 a barrel from $108.99 a week earlier. On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for April eased to $102.52 per barrel from $102.59.
Gold is regarded as a safe investment in times of economic or political uncertainty. By late Friday on the London Bullion Market, the price of gold grew to $1,335.25 an ounce from $1,326.50 a week earlier. Silver rose to $21.38 an ounce from $21.27. On the London Platinum and Palladium Market, platinum increased to $1,474 an ounce from $1,447. Palladium climbed to $776 an ounce from $743.
Chinese manufacturing activity contracted in February at its worst rate in seven months, British banking giant HSBC said Monday, the latest data indicating trouble in the world's number two economy. HSBC said its final purchasing managers' index (PMI) for China, which tracks manufacturing activity in factories and workshops, fell to 48.5 last month.
It was a slight increase on the flash PMI of 48.3 but it remained the weakest reading since July. A reading above 50 indicates growth, while anything below signals contraction. By Friday on the London Metal Exchange, copper for delivery in three months fell to $6,854 a tonne from $7,009 week earlier.
--- Three-month aluminium rose to $1,766.75 a tonne from $1,762.
--- Three-month lead dipped to $2,108 a tonne from $2,134.
--- Three-month tin decreased to $23,100 a tonne from $23,499.
--- Three-month nickel gained to $15,388 a tonne from $14,550.
--- Three-month zinc grew to $2,070.75 a tonne from $2,064.75.
Arabica-quality coffee, which has surged close to 80 percent in value since the start of the year, reached 204.10 US cents a pound on Wednesday, the highest level since early March 2012. Robusta meanwhile hit a near one-year peak at $2,136 a tonne on Tuesday. "The main focus of the market is still on Brazil," added Price Futures Group analyst Jack Scoville. "The lack of rain in coffee producing areas over the last month has hurt coffee production potential.
"Traders also keep waiting for more coffee to appear from Vietnam. Exports so far this year from Vietnam have been disappointing." By Friday on ICE Futures US, Arabica for delivery in May leapt to 196.05 US cents a pound from 179.25 cents a week earlier. On Liffe, Robusta for May jumped to $2,076 a tonne from $2,038.
"Any losses in either country could increase world demand." By Friday on Liffe, the price of a tonne of white sugar for delivery in May increased to $484.70 from $476.30 a week earlier. On ICE Futures US, the price of unrefined sugar for delivery in May gained to 18.31 US cents a pound from 17.74 US cents.