Commodity markets mostly climb, oil nears 80 dollars

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Raw material prices mainly rose this week as traders tracked upbeat US company results and economic data, but some gains tapered off before publication of European banks' stress-test results.

Seven European banks, among a total of 91 examined, failed EU stress tests to determine resistance to future financial crises, the London-based Committee of European Banking Supervisors said Friday.

OIL: World oil prices shot higher, nearing 80 dollars per barrel on a range of supportive factors, as traders fretted about the potential impact of a tropical storm on energy installations in the Gulf of Mexico.

New York crude spiked to 79.60 dollars per barrel in early deals on Friday, hitting a level last seen on May 5, before pulling back.

The market was boosted by positive data and corporate earnings, alongside the weak dollar and the overnight formation of Tropical Storm Bonnie in the Gulf of Mexico.

"Prices surged as an array of strong economic data, robust corporate earnings results and continuing concerns over a tropical storm potentially hitting oil operations in the Gulf of Mexico area contributed to the strength of the energy market," said Sucden analyst Myrto Sokou.

Tropical Storm Bonnie, which is disrupting efforts to clean up the massive Gulf of Mexico oil spill, made landfall in Florida on Friday, US weather officials said.

At 1500 GMT the National Hurricane Center reported that Bonnie's center was over Biscayne Bay, on the tip of south-eastern Florida just south of Miami.

The storm was moving west-northwest at nearly 30 kilometres (18 miles) per hour, packing sustained winds of 65 kilometers (40 miles) per hour, with higher gusts.

Oil began the week on the front foot, rebounding on Monday as traders went bargain-hunting after recent falls and followed New York stock market gains.

Prices climbed further on Tuesday as the market anticipated falling US crude oil reserves and kept an eye on a storm brewing in the Caribbean.

Traders shrugged off news that computer giant IBM and Wall Street investment bank Goldman Sachs saw profits slump in the second quarter.

But oil fell on Wednesday amid an unexpected surge in crude reserves in the United States, indicating weaker demand in the key energy-consuming nation, and after Fed chief Ben Bernanke issued a gloomy economic outlook.

Prices staged a stunning rebound on Thursday, surging by more than three percent in New York, as trade was propelled by storm concerns, the weak dollar, upbeat data and more results.

Major US companies AT&T, Caterpillar and 3M all topped analysts' profit projections.

Sentiment also got a boost from positive economic news, lifting hopes of a sustained global recovery.

A top eurozone economic activity indicator, the purchasing managers' index compiled by data and research group Markit, rose unexpectedly in July.

And data showed that new eurozone industrial orders jumped 3.8 percent in May from April, and soared by 22.7 percent from May 2009 -- for the biggest annual increase for 10 years.

On Friday, it emerged that the British economy grew by a blistering 1.1 percent in the second quarter. That was almost double market expectations and marked the strongest pace since 2006.

At the same time, Germany's Ifo business confidence index for July showed the strongest rise for 20 years.

By late Friday on the New York Mercantile Exchange, Texas light sweet crude for delivery in September soared to 78.72 dollars a barrel, from 75.60 dollars for the August contract the previous week.

On London's Intercontinental Exchange, Brent North Sea crude for September delivery jumped to 77.30 dollars compared with 74.96 dollars the previous week.

PRECIOUS METALS: Gold prices climbed towards 1,200 dollars per ounce.

"Gold continues to consolidate around the 1,200-dollar level, effectively trading in about a 30-dollar range since the start of the month," said Raj Patel, head trader at Spread Co in London.

"The weaker dollar of late has offset some of the fall in physical demand for gold, so the market is waiting for direction it seems."

The glamorous metal had struck an all-time peak of 1,265.30 dollars an ounce on June 21.

By late Friday on the London Bullion Market, gold rose to 1,190.50 dollars an ounce from 1,189.25 dollars the previous week.

Silver eased to 18.17 dollars an ounce from 18.25 dollars.

On the London Platinum and Palladium Market, platinum climbed to 1,541 dollars an ounce from 1,505 dollars.

Palladium increased to 460 dollars an ounce from 456 dollars.

BASE METALS: Prices soared on the back of solid economic data and buoyant equities.

"Base metals (are) still trading off equities and broader market sentiment," said VTB Capital analyst Andrey Kryuchenkov.

Over the course of the week, lead soared by 10 percent, tin gained 6.7 percent, nickel surged 7.5 percent and zinc also won 7.5 percent in value.

By Friday on the London Metal Exchange, copper for delivery in three months had jumped to 7,030 dollars a tonne from 6,483 dollars a week earlier.

Three-month aluminium leapt to 2,038 dollars a tonne from 1,978 dollars.

Three-month lead rocketed to 1,950 dollars a tonne from 1,770 dollars.

Three-month tin rallied to 18,789 dollars a tonne from 17,600 dollars.

Three-month zinc rose to 1,926 dollars a tonne from 1,791 dollars.

Three-month nickel leapt to 20,425 dollars a tonne from 18,975 dollars.

COCOA: Cocoa prices sank on profit-taking, after scaling recent dizzy heights that were last witnessed 33 years ago, but analysts warned that the market could push even higher.

"The recent public speculative purchase of seven percent of the global supply by (a) hedge fund investor has prompted a lot of recent volatility in the cocoa price in the short term," said CMC Markets analyst Michael Hewson.

"Concerns about the recent heavy rains in the Ivory Coast have kept a floor under prices and threaten to push them ever higher," he warned.

By Friday on LIFFE -- London's futures exchange -- the price of cocoa for delivery in September eased to 2,302 pounds a tonne from 2,452 pounds the previous week.

On the New York Board of Trade (NYBOT), the September cocoa contract sank to 2,967 dollars a tonne from 3,166 dollars.

SUGAR: Sugar prices rose.

By Friday on NYBOT, the price of unrefined sugar for delivery in October increased to 18.30 US cents a pound from 17.19 cents the previous week.

On LIFFE, the price of a tonne of white sugar for October rallied to 555 pounds from 527 pounds.

COFFEE: Coffee futures pulled lower.

By Friday on LIFFE, Robusta for delivery in September slid to 1,724 dollars a tonne from 1,758 dollars the previous week.

On NYBOT, Arabica for September eased to 166.70 US cents a pound from 167.10 cents.

GRAINS AND SOYA: Maize, soya and wheat prices enjoyed mixed fortunes.

By Friday on the Chicago Board of Trade, maize for delivery in December dipped to 3.90 dollars a bushel from 4.07 dollars the previous week.

November-dated soyabean meal -- used in animal feed -- rose to 9.86 dollars from 9.85 dollars.

Wheat for September firmed to 6.01 dollars a bushel from 5.87 dollars.

RUBBER: Malaysian rubber prices drifted higher in subdued trading conditions, dealers said.

The Malaysian Rubber Board's benchmark SMR20 firmed to 286.0 US cents per kilo, from 285.90 cents last week.


© 2010 AFP

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