Oil prices hit new 2.5-year peaks in New York

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New York oil prices surged Friday to the highest level in two-and-a-half years as Libyan dictator Moamer Kadhafi's forces regained ground against rebels.

Libya, a key crude exporting nation in the Middle East and North Africa region, has seen its oil output slashed by violent unrest.

Commodity markets also reacted to a key employment report in the United States, which is a major consumer of raw materials.

The US unemployment rate fell to a two-year low of 8.8 percent in March as the private sector pumped out jobs, official data showed Friday, signalling recovery in the troubled market.

It was the lowest jobless rate since March 2009 thanks to stronger private job creation, the Labor Department reported.

"Overall, hugely encouraging, and more to come as the small-firm recovery gathers speed," said Ian Shepherdson, chief US economist at High Frequency Economics.

OIL: New York's light sweet crude spiked Friday to $107.93 per barrel -- the highest level since late September 2008.

The market won support as Libyan rebels battled Moamer Kadhafi's forces at the oil town of Brega, while the West backed off from arming the rag-tag fighters and pushed for a political solution instead.

"I think again investors are back looking at the unrest in Libya, so that is the reason why oil has hit two-and-a-half year highs," said Ong Yi Ling, investment analyst for Phillip Futures in Singapore.

Renewed gains by Kadhafi's men indicated prolonged civil strife in the war-torn oil-exporting nation.

Ong added that a third consecutive week of declines in US jobless claims also renewed investor confidence in the economy of the world's largest oil consumer.

The number of first-time claims for unemployment insurance payments dropped to a seasonally adjusted 388,000 in the week ending March 26, from an upwardly revised 394,000 the week before, the Labor Department said Thursday.

By late Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in May jumped to $118.21 a barrel from $115.10 one week earlier.

On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for May, increased to $107.50 a barrel from $105.71.

PRECIOUS METALS: Gold fell a week after hitting a record $1,447.82 an ounce thanks to its status of a safe haven investment amid Middle East unrest and the aftermath of Japan's natural disaster.

By late Friday on the London Bullion Market, gold dropped to $1,418 an ounce from $1,436 a week earlier.

Silver dipped to $37.63 an ounce from $37.68.

On the London Platinum and Palladium Market, platinum grew to $1,773 an ounce from $1,752.

Palladium climbed to $772 an ounce from $754.

BASE METALS: Aluminium struck a 2.5-year-high Friday before falling back, while other base metals slid over the week.

Aluminium futures reached 2,656 dollars a tonne Tuesday -- the highest level since September 2008.

"Aluminium and lead are underpinned -- aluminium as high oil prices could impact production and lead on the back of a pick-up in demand for back-up batteries in Japan," said FastMarkets analyst William Adams.

By late Friday on the London Metal Exchange (LME), copper for delivery in three months sank to $9,306 a tonne from $9,711 a week earlier.

Three-month aluminium dipped to $2,610 a tonne from $2,642.

Three-month lead edged down to $2,672 a tonne from $2,673.75.

Three-month tin fell to $31,400 a tonne from $31,800.

Three-month zinc slipped to $2,333 a tonne from $2,380.50.

Three-month nickel dropped to $25,425 a tonne from $27,050.

COCOA: Cocoa futures struck multi-month lows, losing a tenth of their value in the process, as fighters backing internationally recognised Ivory Coast president Alassane Ouattara seized control of the world's biggest cocoa exporting port.

"Attention in the cocoa market remains focused on the situation in Ivory Coast, which accounts for over one third of global production and where internal fighting has led to an almost standstill in cocoa exports in the past few months," said analysts at Barclays Capital.

Ouattara's forces took control of the San Pedro port Thursday after sweeping southwards from their strongholds in the north over the past week, seizing several other towns in control of Laurent Gbagbo, who refuses to cede power.

Ivory Coast is the world's top cocoa producer and exporter, but the industry has been strangled by international sanctions trying to choke off Gbagbo's economic power and force him to step down from the presidency.

By Friday on LIFFE, London's futures exchange, cocoa for delivery in July stood at £1,898 a tonne compared with £2,111 for the May contract a week earlier.

In New York on the NYBOT-ICE, cocoa for May fell to $2,933 a tonne from $3,260.

GRAINS AND SOYA: Maize prices rallied.

"Corn (maize), wheat and soybean prices made substantial gains," said analysts at Commerzbank.

"Corn's sharp gains especially were most probably in connection with the publication of US inventory data up to March 1st, revealing a 15 percent fall in corn inventories."

By Friday on the Chicago Board of Trade, Maize for delivery in May jumped to $7.38 a bushel from $6.89.

May-dated soyabean meal -- used in animal feed -- climbed to $14.02 a bushel from $13.60 a week earlier.

Wheat for May gained to $7.61 from $7.33.

COFFEE: Coffee prices extended losses.

By Friday on LIFFE, Robusta for delivery in July stood at $2,421 a tonne compared with $2,609 for the May contract a week earlier.

On NYBOT-ICE, Arabica for May eased to 264.80 US cents a pound from 268.75 cents.

SUGAR: Sugar futures ended mixed.

By Friday on NYBOT-ICE, the price of unrefined sugar for delivery in May dropped to 27.14 US cents a pound from 27.88 cents a week earlier.

On LIFFE, the price of a tonne of white sugar for May increased to £714.10 from £711.60.

© 2011 AFP

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