Commodities hold steady after two volatile weeks
AFP, LONDON
Sun, May 22, 2011
Most commodity markets stabilized this week after two weeks of choppy trade, but crude oil sank further after the International Energy Agency (IEA) warned that high price levels could endanger global economic growth.
“After tumultuous price moves through the first two weeks of May, commodity prices have stabilized and in certain cases posted a rebound, but the pace of the recovery has been mixed,” Barclays Capital analyst Sudakshina Unnikrishnan said.
OIL: Crude futures fell after the IEA called for increased oil output to tackle the problem of high prices.
The IEA said that despite a recent 10-percent drop, oil prices remained high because of strong demand and geopolitical uncertainty — a reference to unrest in North Africa and the Middle East.
New York oil prices had surged above US$100 a barrel on Wednesday, lifted by a weak dollar and an unexpected stabilization in US crude stockpiles.
Prices rallied after the US government’s Department of Energy announced that US crude stockpiles had failed to rise as expected in the week to May 13.
Traders were still monitoring the political situation in the Middle East and North Africa, where uprisings have already toppled the leaders of Tunisia and Egypt and unrest has spread to other parts of the oil-producing region.
By late on Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in July had fallen to US$110.92 a barrel from US$112.85 for the June contract the previous week.
On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for June stood at US$97.41 a barrel compared with US$98.81.
PRECIOUS METALS: Gold, silver and platinum drifted lower, but palladium won ground.
“The precious metals mirrored the mixed mood, taking direction from currencies,” Fast Markets analyst James Moore said.
Gold, fresh from striking record highs at the start of this month, will enjoy buoyant demand this year, particularly from China and India, the World Gold Council said in a report on Thursday.
Gold struck a record US$1,577.57 per ounce on May 2, as the safe---haven precious metal was lifted by a weak US dollar, low US interest rates and concerns over high inflation.
However, the metal has since tailed off slightly, amid a wider commodities sell-off.
By late on Friday on the London Bullion Market, gold fell to US$1,491 an ounce from US$1,506 the previous week.
Silver dipped to US$34.80 an ounce from US$36.20.
On the London Platinum and Palladium Market, platinum eased to US$1,767 an ounce from US$1,774.
Palladium edged upwards to US$734 an ounce from US$718.
BASE METALS: Industrial metals traded mixed amid jitters over the dollar, the eurozone debt crisis and the faltering global economy.
“Fears of further dollar strength, the debt crisis in the eurozone and slowing global growth momentum, as central banks tighten monetary policy to curb rising inflation, should keep the rallies in check,” analyst Robin Bhar at Credit Agricole CIB said.
By late on Friday on the London Metal Exchange (LME), copper for delivery in three months rallied to US$9,040 a tonne from US$8,825 the previous week.
Three-month aluminum saw drop to US$2,526.75 a tonne from US$2,600.
Three-month lead rose to US$2,486 a tonne from US$2,325.
Three-month tin slipped to US$28,175 a tonne from US$29,100.
Three-month zinc rose to US$2,169 a tonne from US$2,168.
Three-month nickel decreased to US$23,485 a tonne from US$24,600.
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