World oil prices spike towards $100-per-barrel milestone
Oil is fast approaching $100 for the first time in two years, at the end of a momentous week which saw the market driven by the Brent contract's looming expiry, supply-side worries and falling US reserves.
Other major global commodity markets were also pushed higher by supply concerns. Coffee, maize, platinum, palladium and soya all forged multi-year peaks, while rubber stretched to a new record high.
OIL: London Brent oil surged to $99.20 a barrel late on Friday -- touching the highest level since October 1, 2008 -- and encroaching on the key psychological milestone of $100.
"London's benchmark Brent crude touched on highs above $99 ahead of February expiry on Friday," VTB Capital analyst Andrey Kryuchenkov told AFP.
"It is because it's the last day of trading for the February contract, and the market is rolling into March," he added, and also cited volatile light trading volumes. March becomes the front-month contract next week.
In recent days and weeks, oil prices have been catapulted higher as recent freezing winter weather stoked hopes of rising energy demand in Europe and elsewhere.
The market has also been propelled by the weaker dollar, supply problems and falling energy reserves in the United States.
On Wednesday, Brent oil had leapt close to 99 dollars, boosted as the key Trans-Alaskan pipeline remained shut following a leak that struck over the weekend.
The key link reopened on Thursday, dampening sentiment, but some analysts still predict that oil will strike $100 in the near future.
"The recent rise in crude oil prices has prompted some speculation that we could well see $100 prices quite soon," said CMC Markets analyst Michael Hewson.
He added: "Brent crude pushed close to $100 on increased consumption on the back of the cold winter weather in Europe and a supply glut of (New York crude) which has depressed the US price, allowing the European price to surge ahead of its US counterpart."
In earlier deals on Friday, prices fell as traders had digested fresh moves by China, the world's biggest energy user, to curb its high inflation, analysts said.
Traders had reacted to China's announcement that its central bank planned to raise the amount of money that lenders are required to keep in reserve as the Asian nation seeks to rein in its high inflation.
The bank reserve requirement ratio would be raised by 50 basis points beginning on January 20, the People's Bank of China said in a statement.
By Friday afternoon on London's Intercontinental Exchange, Brent North Sea crude for delivery in February leapt to $98.65 a barrel from $94.16 a week earlier.
On the New York Mercantile Exchange, Texas light sweet crude for February, rallied to $91.23 a barrel from $89.26.
PRECIOUS METALS: Palladium enjoyed the most impressive run this week to strike 823.95 for the first time since March 2001, before easing on profit-taking. Platinum meanwhile hit the best level since July 2008.
"Hopes for the global automotive recovery and China's rising demand for autocatalytic converters for petrol engines continue to drive platinum group metals higher, especially palladium," added Kryuchenkov.
Elsewhere, metals consultancy GFMS forecast this week that gold could hit record highs above $1,600 per ounce later this year, aided by low interest rates and stubborn concerns over the eurozone debt crisis.
"GFMS are expecting that towards the summer prices could start to move materially higher, with gold possibly breaking through $1,500 (per ounce) at that stage," GFMS said in its latest report.
"They also see an approach to or even a breach of $1,600 by late 2011/early 2012 as quite feasible."
Gold had hit a record 1,431.25 dollars on December 7, boosted by its safe-haven status as investors fretted over the eurozone crisis.
By late Friday on the London Bullion Market, gold was unchanged at $1,367 an ounce from a week earlier.
Silver fell to $28.27 an ounce from $28.39.
On the London Platinum and Palladium Market, platinum jumped to $1,811 an ounce from $1,735.
Palladium leapt to $795 an ounce from $754.
BASE METALS: Nickel was the star performer, hitting an eight-month pinnacle of 25,999 dollars per tonne on the back of supply-side factors, according to Barclays Capital analyst Gayle Berry.
"Prices have been receiving support and nearby spreads have tightened on concerns that heavy flooding in parts of Australia may affect production, and that an approaching cyclone has caused Societe Le Nickel (SLN) to suspend mining in five locations in New Caledonia," Berry said.
By late Friday on the London Metal Exchange (LME), copper for delivery in three months jumped to $9,640 a tonne from $9,448 a week earlier.
Three-month aluminium slid to $2,470 a tonne from $2,529.
Three-month lead rose to $2,668 a tonne from $2,627.
Three-month tin increased to $26,750 a tonne from $26,350 a week earlier.
Three-month zinc gained to $2,455 a tonne from $2,434.
Three-month nickel rallied to $25,747 a tonne from $24,510.
COCOA: Cocoa climbed in volatile trade as the market was beset by political uncertainty in key producer Ivory Coast.
Ivory Coast leader Alassane Ouattara on Friday demanded the use of force to oust strongman Laurent Gbagbo who has refused to cede power after disputed elections, speaking to a US think-tank via videolink.
"I believe seriously that force should be used to remove Mr. Gbagbo," Ouattara said in a message broadcast from Abidjan.
"This is clearly a situation of gross human rights violations," he said.
"I do not want bloodshed," Ouattara said. But Gbagbo, "at some stage has to know," that the situation is serious.
By Friday on LIFFE, London's futures exchange, cocoa for March jumped to £1,979 a tonne from £1,913 a week earlier.
On the New York Board of Trade (NYBOT), cocoa for delivery in March rose to $2,990 a tonne from $2,863 a week earlier.
COFFEE: Coffee prices soared to a 13-year peak in London and a two-year high in London on the back of limited supplies.
Arabica spiked to 244.50 cents per pound and Robusta touched 2,185 dollars on Wednesday, before profit-taking set in.
"Market fundamentals continue to be favourable to the support of high price levels," said the International Coffee Organisation in a market report.
"Adverse weather is still disrupting harvesting and transportation in many exporting countries and affecting short-term coffee supplies."
By Friday on NYBOT, Arabica for delivery in March was unchanged at 233.85 cents a pound from a week earlier.
On LIFFE, Robusta for March increased to $2,116 a tonne by Friday from $2,028 a week earlier.
SUGAR: Sugar futures pulled away from recent 30-year highs as many traders opted to take profits.
Late last month, the commodity had hit 34.77 US cents a pound in New York on the back of solid Asian demand, reaching a level last seen in 1981.
By Friday this week on NYBOT, the price of unrefined sugar for delivery in March dipped to 30.88 US cents a pound from 31.63 cents a week earlier.
On LIFFE, the price of a tonne of white sugar for March declined to £770.20 from £777.20 a week earlier.
GRAINS AND SOYA: Soya and maize hit their highest points since July 2008, boosted by scarce supplies. The two commodities rallied as high as $14.32 and $6.49 respectively, before retreating slightly.
"A series of supply disappointments have marred the global grains supply landscape over the past year on adverse weather, ranging from floods in Canada, Pakistan and more recently Australia to drought in Russia, Ukraine and Kazakhstan and dry weather in Argentina," said analyst Sudakshina Unnikrishnan at Barclays Capital.
"Lower supplies have been exacerbated by export restrictions and thin inventory levels in a positive demand environment."
By Friday on the Chicago Board of Trade, March-dated soyabean meal -- used in animal feed -- leapt to $14.09 a bushel from $13.65 a week earlier.
Maize for delivery in March gained to $6.38 a bushel from $5.95.
Wheat for March eased to $7.62 from $7.74.
RUBBER: Prices continued to break records, hitting new highs following positive regional futures markets, dealers said.
The Malaysian Rubber Board's benchmark SMR20 rallied to 527.50 US cents per kilo, from 506.45 cents a week earlier.
© 2011 AFP