Commodity prices diverge on signs of US recovery
Sunday, 29 March 2009
LONDON, Mar 28 (AFP): Oil prices rallied this week on signs of a rosier future for the United States (US) economy, which in turn weighed on gold futures as investors pulled out of the 'safe-haven' yellow metal.
OIL: Oil prices hit four-month peaks above 54 dollars a barrel on signs of economic recovery for the US, the world's biggest consumer of energy.
After surging early on, crude futures faltered ahead of the weekend on profit-taking but still managed to gain over the week.
Oil prices surged past 54 dollars a barrel in tandem with a world stock market rally on a US government plan worth $500 billion (366 billion euros) to rid ailing banks of their toxic assets.
Crude futures went on to fall in the middle of the week as the market digested news that US crude reserves surged by more than expected last week, indicating weak demand in the United States.
The US Department of Energy said that American crude oil reserves jumped by 3.3 million barrels in the week ending March 20, against market expectations for a smaller gain of 1.3 million barrels.
Prices rebounded Thursday as revised data showed the US economy shrank 6.3 per cent in the fourth quarter ended December, which was worse than the initial estimate of a 6.2 per cent decline.
The slump was the steepest since 1982 but not as bad as the 6.6 per cent annualised drop expected on average by private forecasters.
By Friday on the New York Mercantile Exchange (NYMEX), light sweet crude for delivery in May rose to 52.21 dollars a barrel from 51.77 dollars a week earlier.
On London's InterContinental Exchange (ICE), Brent North Sea crude for May climbed to 51.80 dollars a barrel from 50.76 dollars a barrel a week earlier.
PRECIOUS METALS: Gold prices led its sister metal silver lower. Platinum and palladium however reached the highest points since the end of 2008 on hopes of a turnaround in the US car sector.
"Given the perceived reduction in demand for safe-haven assets... gold could look to consolidate back into the previous 890-940 dollar range," said analyst James Moore at thebulliondesk.com.
Analysts at Barclays Capital said that platinum and its sister metal palladium rallied "after a US senator said that the Obama administration task force was likely to recommend more aid for US automakers."
Platinum and palladium are used in the manufacture of catalytic converters which help to reduce pollution caused by vehicle emissions.
By late Friday on the London Bullion Market, gold slid to 924 dollars an ounce compared to 958.30 dollars reached a week earlier.
Silver fell to 13.22 dollars an ounce from 13.65 dollars.
On the London Platinum and Palladium Market, platinum rose to 1,131 dollars an ounce at the late fixing on Friday from 1,100 dollars a week earlier.
Palladium gained to 215 dollars an ounce from 206 dollars.
BASE METALS: Base metals prices mostly fell but copper surprised the market with a gain.
"Given the continued deterioration in the macroeconomic environment, copper resilience is rather surprising," said Calyon analyst Robin Bhar.
"Chinese buying has come to the rescue of the copper market but we question its sustainability. Chinese restocking is masking weak underlying global copper consumption growth and a market in growing oversupply."
By Friday on the London Metal Exchange, copper for delivery in three months rose to 3,994 dollars a tonne from 3,959 dollars the previous week.
Three-month aluminium slipped to 1,415 dollars a tonne from 1,469 dollars.
Three-month lead fell to 1,262 dollars a tonne from 1,310 dollars.
Three-month tin dipped to 10,175 dollars a tonne from 10,257 dollars.
Three-month zinc advanced to 1,335 dollars a tonne from 1,254 dollars.
Three-month nickel decreased to 9,649 dollars a tonne from 9,961 dollars.
COCOA: Cocoa prices steadied.
"Stocks of cocoa are piling up in Europe as the economic slowdown hits chocolate sales, with consumers switching to cheaper brands with a lower cocoa content," said the commodities publication Public Ledger.
By Friday on LIFFE, London's futures exchange, the price of cocoa for delivery in May edged up to 1,923 pounds a tonne from 1,921 pounds a week earlier.
On the New York Board of Trade (NYBOT), the May cocoa contract nudged down to 2,585 dollars a tonne from 2,588 dollars.
COFFEE: Coffee prices dropped as Vietnam revised higher its estimate for output.
However coffee supplies are expected to be tight in 2009/10.
Nestor Osorio, executive director of the International Coffee Organisation, said consumption was growing despite the global economic downturn and production, particularly in South America, was likely to fall.
Osorio spoke to reporters in London, according to the Public Ledger.
By Friday on LIFFE, Robusta for delivery in May fell to 1,540 dollars a tonne from 1,572 dollars a week earlier.
On the NYBOT, Arabica for May declined to 115.55 US cents a pound from 116.55 cents.
GRAINS AND SOYA: Grains and soya prices fell as traders awaited key US government forecasts regarding the market due Tuesday.
By Friday on the Chicago Board of Trade, maize for delivery in May dropped to 3.86 dollars a bushel from 3.97 dollars the previous week.
May-dated soyabean meal -- used in animal feed -- fell to 9.21 dollars from 9.52 dollars.
Wheat for May decreased to 5.06 dollars a bushel from 5.50 dollars.
SUGAR: Sugar prices slid after striking seven-month highs the previous week.
"Sugar has enjoyed one of the most consistent rallies among soft commodities since the start of the year," noted analysts at Standard Chartered.
By Friday on LIFFE, the price of a tonne of white sugar for delivery in May dropped to 388.30 pounds from 407 pounds a week earlier.
On NYBOT, the price of unrefined sugar for May slipped to 12.58 US cents a pound from 13.53 cents.
RUBBER: Malaysian rubber prices rose as heavy rains hit supplies, dealers said.
By Friday, the Malaysian Rubber Board's benchmark SMR20 rose to 144.80 US cents a kilogramme from 140.35 cents a week earlier.
OIL: Oil prices hit four-month peaks above 54 dollars a barrel on signs of economic recovery for the US, the world's biggest consumer of energy.
After surging early on, crude futures faltered ahead of the weekend on profit-taking but still managed to gain over the week.
Oil prices surged past 54 dollars a barrel in tandem with a world stock market rally on a US government plan worth $500 billion (366 billion euros) to rid ailing banks of their toxic assets.
Crude futures went on to fall in the middle of the week as the market digested news that US crude reserves surged by more than expected last week, indicating weak demand in the United States.
The US Department of Energy said that American crude oil reserves jumped by 3.3 million barrels in the week ending March 20, against market expectations for a smaller gain of 1.3 million barrels.
Prices rebounded Thursday as revised data showed the US economy shrank 6.3 per cent in the fourth quarter ended December, which was worse than the initial estimate of a 6.2 per cent decline.
The slump was the steepest since 1982 but not as bad as the 6.6 per cent annualised drop expected on average by private forecasters.
By Friday on the New York Mercantile Exchange (NYMEX), light sweet crude for delivery in May rose to 52.21 dollars a barrel from 51.77 dollars a week earlier.
On London's InterContinental Exchange (ICE), Brent North Sea crude for May climbed to 51.80 dollars a barrel from 50.76 dollars a barrel a week earlier.
PRECIOUS METALS: Gold prices led its sister metal silver lower. Platinum and palladium however reached the highest points since the end of 2008 on hopes of a turnaround in the US car sector.
"Given the perceived reduction in demand for safe-haven assets... gold could look to consolidate back into the previous 890-940 dollar range," said analyst James Moore at thebulliondesk.com.
Analysts at Barclays Capital said that platinum and its sister metal palladium rallied "after a US senator said that the Obama administration task force was likely to recommend more aid for US automakers."
Platinum and palladium are used in the manufacture of catalytic converters which help to reduce pollution caused by vehicle emissions.
By late Friday on the London Bullion Market, gold slid to 924 dollars an ounce compared to 958.30 dollars reached a week earlier.
Silver fell to 13.22 dollars an ounce from 13.65 dollars.
On the London Platinum and Palladium Market, platinum rose to 1,131 dollars an ounce at the late fixing on Friday from 1,100 dollars a week earlier.
Palladium gained to 215 dollars an ounce from 206 dollars.
BASE METALS: Base metals prices mostly fell but copper surprised the market with a gain.
"Given the continued deterioration in the macroeconomic environment, copper resilience is rather surprising," said Calyon analyst Robin Bhar.
"Chinese buying has come to the rescue of the copper market but we question its sustainability. Chinese restocking is masking weak underlying global copper consumption growth and a market in growing oversupply."
By Friday on the London Metal Exchange, copper for delivery in three months rose to 3,994 dollars a tonne from 3,959 dollars the previous week.
Three-month aluminium slipped to 1,415 dollars a tonne from 1,469 dollars.
Three-month lead fell to 1,262 dollars a tonne from 1,310 dollars.
Three-month tin dipped to 10,175 dollars a tonne from 10,257 dollars.
Three-month zinc advanced to 1,335 dollars a tonne from 1,254 dollars.
Three-month nickel decreased to 9,649 dollars a tonne from 9,961 dollars.
COCOA: Cocoa prices steadied.
"Stocks of cocoa are piling up in Europe as the economic slowdown hits chocolate sales, with consumers switching to cheaper brands with a lower cocoa content," said the commodities publication Public Ledger.
By Friday on LIFFE, London's futures exchange, the price of cocoa for delivery in May edged up to 1,923 pounds a tonne from 1,921 pounds a week earlier.
On the New York Board of Trade (NYBOT), the May cocoa contract nudged down to 2,585 dollars a tonne from 2,588 dollars.
COFFEE: Coffee prices dropped as Vietnam revised higher its estimate for output.
However coffee supplies are expected to be tight in 2009/10.
Nestor Osorio, executive director of the International Coffee Organisation, said consumption was growing despite the global economic downturn and production, particularly in South America, was likely to fall.
Osorio spoke to reporters in London, according to the Public Ledger.
By Friday on LIFFE, Robusta for delivery in May fell to 1,540 dollars a tonne from 1,572 dollars a week earlier.
On the NYBOT, Arabica for May declined to 115.55 US cents a pound from 116.55 cents.
GRAINS AND SOYA: Grains and soya prices fell as traders awaited key US government forecasts regarding the market due Tuesday.
By Friday on the Chicago Board of Trade, maize for delivery in May dropped to 3.86 dollars a bushel from 3.97 dollars the previous week.
May-dated soyabean meal -- used in animal feed -- fell to 9.21 dollars from 9.52 dollars.
Wheat for May decreased to 5.06 dollars a bushel from 5.50 dollars.
SUGAR: Sugar prices slid after striking seven-month highs the previous week.
"Sugar has enjoyed one of the most consistent rallies among soft commodities since the start of the year," noted analysts at Standard Chartered.
By Friday on LIFFE, the price of a tonne of white sugar for delivery in May dropped to 388.30 pounds from 407 pounds a week earlier.
On NYBOT, the price of unrefined sugar for May slipped to 12.58 US cents a pound from 13.53 cents.
RUBBER: Malaysian rubber prices rose as heavy rains hit supplies, dealers said.
By Friday, the Malaysian Rubber Board's benchmark SMR20 rose to 144.80 US cents a kilogramme from 140.35 cents a week earlier.