Oil hits record highs despite Saudi output hike
Sunday, 29 June 2008
LONDON, June 28 (AFP): Oil prices hit fresh record highs above 142 dollars this week as a high-level energy summit between consumers and producers in Jeddah, Saudi Arabia, failed to dampen the red-hot market.
Prices moved higher as traders concentrated on fresh violence in Nigeria, the weak dollar, tight energy supplies and extremely volatile world financial markets.
At the Jeddah meeting, Saudi Arabia announced it would increase output by 200,000 barrels per day but that had been flagged beforehand and so it did little to cool the market.
OIL: Oil prices jumped to record high levels above 142 dollars on Friday as the US currency weakened further and stock markets tumbled at the end of a rollercoaster week for investors.
New York light sweet crude struck a historic peak of 142.26 dollars a barrel and Brent North Sea crude reached an all-time high of 142.13 dollars.
OPEC's president on Thursday predicted that oil prices could reach 170 dollars this year owing to a weak dollar and geopolitical unrest.
Crude futures crossed 140 dollars for the first time on Thursday following the price forecast made by OPEC's chief, Algerian Energy Minister Chakib Khelil.
The cost of oil has doubled in a year, with consumers blaming insufficient output from the Organization of Petroleum Exporting Countries.
However OPEC, which produces 40 per cent of the world's oil, argues that speculators are responsible for pushing up prices in reaction to a falling dollar and tensions in oil-producing countries, such as Iran, Iraq and Nigeria.
A weak US currency makes oil priced in dollars cheaper for foreign buyers, thus pushing up demand for the commodity.
In a volatile week, crude prices had closed down 3.50 dollars on Wednesday after official data revealed an unexpected rise in stockpiles in the United States, the world's biggest energy consumer.
By Friday, New York's main oil futures contract, light sweet crude for August was at 140.85 dollars, up from 134.56 dollars a week earlier.
PRECIOUS METALS: Precious metals prices were lower but gold was supported by the weak US currency.
On the London Bullion Market, gold advanced to 919.50 dollars per ounce at Friday's late fixing from 907.50 dollars a week earlier. Silver eased to 17.40 dollars per ounce from 17.74 dollars.
On the London Platinum and Palladium Market, platinum slid to 2,053 dollars per ounce at the late fixing on Friday from 2,068 dollars a week earlier. Palladium slipped to 467 dollars per ounce from 475 dollars.
BASE METALS: Base metals prices mainly rose, also winning support from the struggling dollar.
"For the moment, the dollar seems to be the underlying ruling factor in the metals," said BaseMetals analyst William Adams.
By Friday, copper for delivery in three months had jumped to 8,493 dollars per tonne on the London Metal Exchange from 8,330 dollars a week earlier.
Three-month aluminium rose to 3,086 dollars per tonne from 3,073 dollars. Three-month lead climbed to 1,819 dollars per tonne from 1,811 dollars. Three-month zinc was up to 1,946 dollars per tonne from 1,934 dollars.
COCOA: Cocoa prices rose in line with other commodities. New York cocoa soared as high as 3,190 dollars a tonne, a level last seen in March 1980.
By Friday on LIFFE, London's futures exchange, the price of cocoa for September delivery rose to 1,695 pounds per tonne from 1,648 pounds a week earlier.
On the New York Board of Trade (NYBOT), the September cocoa contract rallied to 3,182 dollars per tonne from 3,086 dollars.
COFFEE: Coffee prices moved higher, stoked by strike fears in Brazil, which is the world's biggest producer.
"Concerns of a truckers' strike in Brazil and extra fund buying drove prices up again," Sucden analysts said.
By Friday on LIFFE, Robusta for September delivery had risen to 2,420 dollars per tonne from 2,268 dollars a week earlier.
On the NYBOT, Arabica for September delivery advanced to 152.20 US cents per pound from 140.45 cents.
SUGAR: Sugar prices were mixed in subdued trade. By Friday on LIFFE, the price per tonne of white sugar for October delivery dipped to 377.80 pounds from 378.10 pounds the previous week.
GRAINS AND SOYA: Grains and soya prices advanced on the back of poor weather conditions in leading producer the United States.
"Grains prices have rallied strongly, with ongoing wet weather conditions in the US Midwest the key driver of the current rise in prices," said Barclays Capital analysts.
"We remain particularly positive on corn and soybean prices, as US yields and production are likely to be affected by the adverse weather."
By Friday on the Chicago Board of Trade, maize for July delivery rose to 7.53 dollars per bushel from 7.21 dollars the previous week.
July-dated soyabean meal-used in animal feed-climbed to 15.80 dollars from 15.32 dollars.
Wheat for July delivery was up to 9.19 dollars per bushel from 8.66 dollars.
RUBBER: Malaysian rubber prices were higher in tandem with rising oil prices, dealers said.
"The rubber price (is) ... following what is happening to the oil prices and commodity prices," said Intracom dealer Robert Chai.
On Friday, the Malaysian Rubber Board's benchmark SMR20 rose to 319.40 US cents per kilogramme (2.2 pounds) from 316.75 a week earlier.
Prices moved higher as traders concentrated on fresh violence in Nigeria, the weak dollar, tight energy supplies and extremely volatile world financial markets.
At the Jeddah meeting, Saudi Arabia announced it would increase output by 200,000 barrels per day but that had been flagged beforehand and so it did little to cool the market.
OIL: Oil prices jumped to record high levels above 142 dollars on Friday as the US currency weakened further and stock markets tumbled at the end of a rollercoaster week for investors.
New York light sweet crude struck a historic peak of 142.26 dollars a barrel and Brent North Sea crude reached an all-time high of 142.13 dollars.
OPEC's president on Thursday predicted that oil prices could reach 170 dollars this year owing to a weak dollar and geopolitical unrest.
Crude futures crossed 140 dollars for the first time on Thursday following the price forecast made by OPEC's chief, Algerian Energy Minister Chakib Khelil.
The cost of oil has doubled in a year, with consumers blaming insufficient output from the Organization of Petroleum Exporting Countries.
However OPEC, which produces 40 per cent of the world's oil, argues that speculators are responsible for pushing up prices in reaction to a falling dollar and tensions in oil-producing countries, such as Iran, Iraq and Nigeria.
A weak US currency makes oil priced in dollars cheaper for foreign buyers, thus pushing up demand for the commodity.
In a volatile week, crude prices had closed down 3.50 dollars on Wednesday after official data revealed an unexpected rise in stockpiles in the United States, the world's biggest energy consumer.
By Friday, New York's main oil futures contract, light sweet crude for August was at 140.85 dollars, up from 134.56 dollars a week earlier.
PRECIOUS METALS: Precious metals prices were lower but gold was supported by the weak US currency.
On the London Bullion Market, gold advanced to 919.50 dollars per ounce at Friday's late fixing from 907.50 dollars a week earlier. Silver eased to 17.40 dollars per ounce from 17.74 dollars.
On the London Platinum and Palladium Market, platinum slid to 2,053 dollars per ounce at the late fixing on Friday from 2,068 dollars a week earlier. Palladium slipped to 467 dollars per ounce from 475 dollars.
BASE METALS: Base metals prices mainly rose, also winning support from the struggling dollar.
"For the moment, the dollar seems to be the underlying ruling factor in the metals," said BaseMetals analyst William Adams.
By Friday, copper for delivery in three months had jumped to 8,493 dollars per tonne on the London Metal Exchange from 8,330 dollars a week earlier.
Three-month aluminium rose to 3,086 dollars per tonne from 3,073 dollars. Three-month lead climbed to 1,819 dollars per tonne from 1,811 dollars. Three-month zinc was up to 1,946 dollars per tonne from 1,934 dollars.
COCOA: Cocoa prices rose in line with other commodities. New York cocoa soared as high as 3,190 dollars a tonne, a level last seen in March 1980.
By Friday on LIFFE, London's futures exchange, the price of cocoa for September delivery rose to 1,695 pounds per tonne from 1,648 pounds a week earlier.
On the New York Board of Trade (NYBOT), the September cocoa contract rallied to 3,182 dollars per tonne from 3,086 dollars.
COFFEE: Coffee prices moved higher, stoked by strike fears in Brazil, which is the world's biggest producer.
"Concerns of a truckers' strike in Brazil and extra fund buying drove prices up again," Sucden analysts said.
By Friday on LIFFE, Robusta for September delivery had risen to 2,420 dollars per tonne from 2,268 dollars a week earlier.
On the NYBOT, Arabica for September delivery advanced to 152.20 US cents per pound from 140.45 cents.
SUGAR: Sugar prices were mixed in subdued trade. By Friday on LIFFE, the price per tonne of white sugar for October delivery dipped to 377.80 pounds from 378.10 pounds the previous week.
GRAINS AND SOYA: Grains and soya prices advanced on the back of poor weather conditions in leading producer the United States.
"Grains prices have rallied strongly, with ongoing wet weather conditions in the US Midwest the key driver of the current rise in prices," said Barclays Capital analysts.
"We remain particularly positive on corn and soybean prices, as US yields and production are likely to be affected by the adverse weather."
By Friday on the Chicago Board of Trade, maize for July delivery rose to 7.53 dollars per bushel from 7.21 dollars the previous week.
July-dated soyabean meal-used in animal feed-climbed to 15.80 dollars from 15.32 dollars.
Wheat for July delivery was up to 9.19 dollars per bushel from 8.66 dollars.
RUBBER: Malaysian rubber prices were higher in tandem with rising oil prices, dealers said.
"The rubber price (is) ... following what is happening to the oil prices and commodity prices," said Intracom dealer Robert Chai.
On Friday, the Malaysian Rubber Board's benchmark SMR20 rose to 319.40 US cents per kilogramme (2.2 pounds) from 316.75 a week earlier.