LONDON: Commodity markets saw mixed fortunes this week, but Brent oil hit a one-month peak on hopes of a deal that would resolve the US budget gridlock and avoid a damaging default. Gold prices, in contrast, touched a three-month low as the prospect of a US deal weighed on investor demand for the safe-haven precious metal, dealers said.
OIL: Brent crude oil on Thursday hit a one-month peak at $112 per barrel, propelled by hopes of a US budget deal and simmering Middle East tensions.
Markets rallied in response to a Republican proposal to offer a six-week extension of US borrowing authority, with less than a week before the government is expected to run out of cash to pay its bills on October 17.
The White House said that Obama would be open to a short-term debt ceiling hike. But analysts said oil markets were under pressure owing to worries about a US supply glut.
“Oil prices rose to a four-week high of $112 per barrel yesterday (Thursday) on the back of Middle Eastern concerns allied to progress being made between the Republicans and Democrats over a deal to end the political stalemate in the United States,” said Inenco analyst Gary Hornby.
Prices tailed off towards the end of the week as Opec trimmed its oil demand predictions. By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in November jumped to $111.39 per barrel from $109.06 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for November eased to $102.94 a barrel from $103.53 a week earlier.
PRECIOUS METALS: Gold sank to a new three-month trough at $1,260.60 per ounce, while silver hit the lowest level since early October. Platinum prices dived on Friday to $1,362.35 per ounce, touching a level last seen on July 10, on upbeat news from key producer South Africa.
Mining giant Anglo American Platinum said on Thursday that workers at its South African mines have ended an almost two week strike over job cuts after reaching a settlement. The world’s top platinum producer said it had lost about 44,000 platinum ounces since the beginning of the strike late last month.
By late Friday on the London Bullion Market, the price of gold dropped to $1,265.50 an ounce from $1,309.75 a week earlier. Silver edged down to $21.52 an ounce from $21.65.
On the London Platinum and Palladium Market, platinum slipped to $1,369 an ounce from $1,386. Palladium firmed to $712 an ounce from $706.
BASE METALS: Base or industrial metals mostly posted gains, winning support from US debt deal hopes and upbeat Alcoa results. Aluminum producer Alcoa said on Tuesday that it swung to profitability in the third quarter on the strength of lower costs and despite lower metals prices in the period.
Alcoa said profits for the quarter ended September 30 came in at $24m on revenues of $5.77bn, compared with a loss of $143m on revenues of $5.83bn a year earlier.
By Friday on the London Metal Exchange, copper for delivery in three months fell to $7,167.75 a tonne from $7,190.50 a week earlier. Three-month aluminium rose to $1,886 a tonne from $1,821.50. Three-month lead increased to $2,097.25 a tonne from $2,055.50. Three-month tin gained to $23,345 a tonne from $22,900. Three-month nickel rose to $13,840 a tonne from $13,590. Three-month zinc climbed to $1,912.50 a tonne from $1,865.25.
COCOA: Prices forged two-year peaks, driven by keen Western demand for the commodity that is mainly used to produce chocolate. London cocoa on Friday hit £1,777 per tonne, which was the highest level since late September 2011.
And in New York, cocoa surged to $2,740 per tonne, a point last reached in November of the same year. By Friday on LIFFE, London’s futures exchange, cocoa for delivery in December soared to £1,773 a tonne from £1,672 a week earlier.
On New York’s NYBOT-ICE exchange, cocoa for December jumped to $2,734 a tonne from $2,587 a week earlier.
COFFEE: Prices dipped on expectations of plentiful supplies from key producer Vietnam, but the market remains above the multi-year lows struck last month.
“Traders there are waiting for Vietnam to harvest and sell, but that is still a few weeks away,” said Price Futures Group analyst Jack Scoville. By Friday on NYBOT-ICE, Arabica for delivery in December decreased to 114.90 US cents a pound from 115.70 cents a week earlier. On LIFFE, Robusta for November eased to $1,723 a tonne from $1,729.
SUGAR: London prices struck a six-month pinnacle at $508.90, as traders eyed expectations of tight supplies in major producer Brazil.
By Friday on NYBOT-ICE, the price of unrefined sugar for delivery in March grew to 18.78 US cents a pound from 18.53 cents a week earlier. On LIFFE, the price of a tonne of white sugar for December rose to $507.20 from $491.40.
RUBBER: Prices rebounded on positive sentiment, dealers said. The Malaysian Rubber Board’s benchmark SMR20 rose to 235.65 US cents a kilo from 231.75 cents the previous week.
AFP
