LONDON, Dec 26, (AFP): Oil prices rallied and sugar futures struck 28-year highs this week amid light trading volumes, with markets winding down activities ahead of the Christmas and New Year festive season.
Oil: Oil prices jumped as a larger-than-expected drop in US energy stockpiles led to hopes of rising demand, traders said.
Data released by the US Department of Energy on Wednesday showed stockpiles of crude dropping by 4.9 million barrels to 327.5 million in the week ending Dec 18, far above analyst expectations of a 1.1 million-barrel drawback.
Distillate inventories also slid 3.1 million barrels last week, against analyst forecasts of a 1.6 million barrel fall.
Data for distillates, which include heating oil, is in focus as winter starts to bite in the United States and Europe.
Analysts cautioned however that despite the fall in stockpiles, inventory levels were still high.
“Crude oil stocks are still lingering near the upper end of the five-year range, thus creating doubt in our mind as to the underlying strength of the recent price rally,” MF Global analyst Tom Pawlicki said.
Improving
Oil prices have meanwhile risen for much of the week as traders bet on improving demand after Opec decided against changing the cartel’s official crude output levels.
The Organization of Petroleum Exporting Countries, as expected, held its crude output quotas unchanged at its meeting in Angola Tuesday, warning of lingering weakness in the world economy.
Tuesday’s meeting capped a year of recovery for oil prices, which have more than doubled since the cartel set strict quota cuts in the depths of the economic crisis a year ago.
In January the cartel enforced total Opec cuts of 4.2 million barrels a day, which helped prices recover from around 32 dollars one year ago.
Meanwhile last week, Opec slightly upgraded its forecast for world oil demand growth next year but said usage in advanced economies would contract again.
Several of the cartel’s members have said the current price of oil is comfortable for them.
By Thursday on the New York Mercantile Exchange (NYMEX), light sweet crude for delivery in February jumped to $77.02 from $74.14 the previous Friday.
On London’s InterContinental Exchange (ICE), Brent North Sea crude for February delivery advanced to $75.63 compared with $74.50.
Precious metals: Gold and silver prices steadied, while platinum and palladium rose. Gold managed to stay above $1,100 in the wake of recent profit-taking following its run-up to a record high of $1,226.56 an ounce at the start of December.
“The dollar continued to determine price direction for the precious complex,” said James Moore, an analyst at the bulliondesk.com. The US currency has weakened recently, lending support to gold, which is seen as a safe-haven investment.
By Thursday on the London Bullion Market, gold stood at $1,104.50 an ounce, unchanged from the previous Friday.
Silver edged up to $17.32 an ounce from $17.31.
On the London Platinum and Palladium Market, platinum increased to $1,456 an ounce Thursday from $1,417 the previous Friday.
Palladium rose to 377 dollars an ounce from 365 dollars.
Base metals: Base metals prices mostly extended recent gains, with zinc and tin enjoying multi-month highs on fund buying.
“The market shook off worse than expected economic data, which does suggest ongoing fund interest is keeping the market buoyant,” said analysts at basemetals.com.
By Thursday on the London Metal Exchange, copper for delivery in three months jumped to $7,070 a tonne from $6,881 a week earlier.
Three-month aluminium fell to $2,249 a tonne from $2,256.
Three-month lead dipped to $2,346 a tonne from $2,356.
Three-month tin increased to $16,100 a tonne from $15,900.
Three-month zinc firmed to $2,525 a tonne from $2,440.
Three-month nickel jumped to $18,721 a tonne from $17,200.
Sugar: Sugar prices hit a fresh 28-year high on tight supplies, traders said.
Unrefined sugar reached 26.98 US cents a pound on Thursday — the highest point since 1981.
“Tight global supplies remain a supportive influence in sugar, and should limit the downside,” said the Public Ledger commodities review.
By Thursday on the New York Board of Trade (NYBOT), the price of unrefined sugar for March rose to 26.76 US cents a pound from 26.27 cents the previous Friday.
On LIFFE, London’s futures exchange, the price of a tonne of white sugar for delivery in March climbed to £694.50 from £678.20.
Struck
Cocoa: Cocoa prices fell on profit-taking having struck the highest levels for 30 years a week earlier amid low output in leading producer Ivory Coast.
On December 17 in London, cocoa struck 2,337 pounds a tonne — a level last seen in October, 1977.
By Thursday on LIFFE, the price of cocoa for delivery in March slipped to £2,242 a tonne from £2,265 the previous Friday.
On NYBOT, the March cocoa contract dropped to $3,275 a tonne from $3,359.
Coffee: Coffee prices retreated.
“A pre-holiday quietness was felt across the markets,” said analysts at Sucden Financial Research
“Looking to next week, we feel sure there will be year-end activity from the funds causing some volatile market action.”
By Thursday on LIFFE, Robusta for delivery in March fell to $1,326 a tonne from $1,374 the previous Friday.
On the NYBOT, Arabica for March decreased to 142.75 US cents a pound from 146.25 cents.
Rubber: Malaysian rubber prices rose owing to weak stockpiles in major producing countries amid the unusually wet weather, dealers said.
The decision by China, the world’s largest rubber consumer, to cut duty on rubber imports added support to prices, they added.
On Thursday, the Malaysian Rubber Board’s benchmark SMR20 climbed to 278.10 US cents a kilo from 273.45 cents the previous Thursday.
