Commodity prices ending year higher

23rd December 2011, Comments 0 comments

Commodity prices mostly rose this week, supported by stronger-than-expected US jobs data and as the European Central Bank provided cheap loans in a bid to sort out the eurozone debt crisis.

OIL: Oil prices rallied thanks to the US jobs data and a sharp drop in crude inventories in the United States -- the world's biggest energy consumer, traders said. Additional support came from unrest in the Middle East region.

Weekly claims for US unemployment benefits fell to the lowest level since April 2008 last week, the Labor Department said Thursday, yet another sign that the jobs market is in recovery in the world's biggest economy.

The data was better than most economists expected, with the official claims figure at 364,000 versus the consensus estimate of 380,000.

"We had very supportive numbers from the US, the jobless claims were relatively positive," said Nick Trevethan, senior commodities strategist for ANZ Research in Singapore.

"However, it is the Christmas holiday season and trading volume is getting pretty light," he told AFP.

Separate data showed that the US economy grew by a slower-than-thought 1.8 percent in the third quarter as household spending dropped according to the Commerce Department.

Growth was down 0.2 percentage points versus the previous estimate and below economist expectations.

Oil prices also won support from official data showing that US crude inventories fell by far more than expected last week.

Promising economic news from the US and Europe sent oil prices surging more than $3.0 on Tuesday, while tensions over major crude-producer Iran added to the buying interest, traders said.

By Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in February jumped to $107.72 a barrel compared with $103.95 a week earlier.

On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for February stood at $99.63 a barrel compared with $94.01 for the January contract which expired this week.

PRECIOUS METALS: Gold rebounded back above $1,600 an ounce after recent sharp falls.

Gold, which in September hit a record high above $1,900 an ounce thanks to the precious metal's status as a safe haven in times of economic troubles, has tumbled in the final quarter of 2011 mainly due to a rising dollar.

A strong greenback makes dollar-denominated commodities like gold more expensive for buyers holding rival currencies, denting demand and in turn prices.

"The sharp falls in the price of gold both in September, and more recently, coincided with a surge in the value of the dollar against other paper currencies," said Julian Jessop, chief economist at Capital Economics research group.

"For now at least, it seems that the US currency is the main beneficiary of the crisis in the eurozone and growing worries about the global economic and financial outlook."

By Friday on the London Bullion Market, gold rose to $1,607.50 an ounce from $1,594 the previous week.

Silver slipped to $29.22 an ounce from $29.78.

On the London Platinum and Palladium Market, platinum climbed to $1,436 an ounce from $1,424.

Palladium grew to $653 an ounce from $624.

BASE METALS: Prices rebounded as "traders adjusted their positions ahead of the Christmas holiday and the year-end," said Fast Markets analyst William Adams.

"We expect the economic and financial backdrop to keep demand (for industrial metals) subdued and that is likely to keep prices under pressure in the medium term."

By Friday on the London Metal Exchange, copper for delivery in three months jumped to $7,648 a tonne from $7,345 the previous week.

Three-month aluminium nudged up to $2,020 a tonne from $2,008.

Three-month lead grew to $2,013 a tonne from $1,990.

Three-month tin climbed to $19,400 a tonne from $18,775.

Three-month zinc edged up to $1,866 a tonne from $1,865.

Three-month nickel increased to $18,802 from $18,500 a tonne.

COCOA: Prices extended gains after recent sharp losses caused by forecasts of excess cocoa supplies.

"Despite growing demand, the cocoa price is likely to have only limited upward scope given the large supply volumes," said Commerzbank analyst Barbara Lambrecht.

"We therefore expect only a modest rise in cocoa prices in 2012."

By Friday on LIFFE, London's futures exchange, cocoa for delivery in March climbed to £1,414 a tonne from £1,399 a week earlier.

In New York on the NYBOT-ICE, cocoa for March rose to $2,217 a tonne from $2,164.

COFFEE: Coffee futures struck a fresh one-year low of 212.35 US cents a pound amid high supplies in Brazil, before ending higher.

By Friday on NYBOT-ICE, Arabica for March rose to 220.75 US cents a pound from 218 cents.

LIFFE, Robusta for delivery in March dropped to $1,845 a tonne compared with $1,903 a week earlier.

SUGAR: Prices recovered after recent falls as the prospect of strong Chinese demand helps to offset expectations of a sugar surplus.

By Friday on NYBOT-ICE, the price of unrefined sugar for delivery in March gained to 23.55 US cents a pound from 22.97 cents a week earlier.

On LIFFE, the price of a tonne of white sugar for March climbed to $610.20 from $600.50.

RUBBER: Rubber prices rebounded on rising demand.

The Malaysian Rubber Board's benchmark SMR20 climbed to 333.85 US cents a kilo from 331.05 cents the previous week.


© 2011 AFP

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