Oil and coffee prices rally
london — Oil prices rose last week on uncertainty over energy supplies passing through Ukraine to the West, while coffee futures rebounded on tight supplies following drought conditions in Brazil.
Oil
Prices rose as tensions over Ukraine and upbeat US energy demand offset poorly-received Chinese data and the prospect of a return to normal Libyan crude exports, analysts said. Oil prices retained upside pressure from signs of robust gasoline demand in the United States, the world’s biggest economy. The latest official US inventories report showed a drop of 5.2 million barrels of motor fuel supplies last week, far much more than the 700,000-barrel decline that had been projected.
Analysts said oil prices remained propped up also by the heightened tensions in eastern Europe. The IEA, which advises nations on energy policy, left its global demand forecast for 2014 roughly unchanged at 92.7 million barrels per day. For crude oil alone, China imported 5.54 million barrels per day in March, a decline of 8.0 per cent from February and the weakest import volume in five months.Brent oil, the benchmark for the pricing of Middle Eastern crude, had struck a five-month low point at $103.95 a barrel the previous week as Libyan supplies appeared set to return to the market.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in May rose to $107.78 a barrel from $106.77 a week earlier. On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for May jumped to $104.21 per barrel from $101.21.
Precious metals
Gold prices recovered from near two-month lows thanks to a weaker dollar and Ukraine concerns. Gold rose “on a combination of the US stimulus outlook, tensions in Ukraine and signs of slowing demand from China”, said Spreadex trader Lee Mumford. The dollar meanwhile sank against the euro mid-week after the minutes to the last Federal Reserve meeting showed a clear dovish tilt among policy makers. A weaker US currency tends to make commodities cheaper for buyers holding rival currencies, pushing up demand.
Gold, seen as a haven investment, had forged a six-month high at $1,392.22 an ounce in April as investors sought to shelter from Russia-Ukraine tensions before falling last week on profit-taking.
By Friday on the London Bullion Market, the price of gold rose to $1,318 an ounce from $1,297.25 a week earlier.
Silver grew to $20.09 an ounce from $19.93.
On the London Platinum and Palladium Market, platinum increased to $1,454 an ounce from $1,444.
Palladium gained to $794 an ounce from $789.
Base metals
Copper fell on profit-taking, having soared the previous week following an earthquake in key producer Chile, while base metals rose generally overall as traders digested minutes from the last Federal Reserve policy meeting.
“Dovish Fed minutes have helped equity markets rally and also appear to have lent support to commodities,” said Standard Bank analyst Leon Westgate.
Nickel meanwhile continued to win support from Indonesia’s ban on exports of the metal.
“Whereas most other metal prices have remained virtually unchanged or in some cases have even fallen since the beginning of the year, the nickel price has soared by 25 per cent,” noted analysts at Commerzbank.
“The most important reason for the price rise is the export ban on unprocessed ore from Indonesia that was introduced this year,” they added in a note to clients.
Indonesia imposed a ban on exports of mineral ore including bauxite, nickel and copper beginning on January 12.
The move is one of a series of industrial policies pushed by nationalist politicians who argue foreign firms reap an inordinate share of the profits from exploiting resources and business opportunities in the fast-growing economy.
By Friday on the London Metal Exchange, copper for delivery in three months fell to $6,692 a tonne from $6,700 week earlier.
Three-month aluminium increased to $1,895 a tonne from $1,846.
Three-month lead advanced to $2,124.75 a tonne from $2,070.
Three-month tin rose to $23,563 a tonne from $23,208.
Three-month nickel rallied to $17,464 a tonne from $16,545.
Three-month zinc climbed to $2,056.75 a tonne from $2,011.
Coffee
Futures rebounded, with New York prices reaching the highest levels in more than two years following a Brazilian drought this year. Arabica-quality coffee hit 207.8 US cents a pound, the highest point since February 2012. Coffee jumped “on forecasts for dry conditions in Brazil... and on the re- duced production estimates from the Brazil Coffee Association”, said analyst Jack Scoville at traders Price Futures Group.
By Friday on the ICE Futures US exchange, Arabica for delivery in May increased to 204.70 US cents a pound from 176 cents a week earlier.
On LIFFE, London’s futures exchange, Robusta for July stood at $2,140 a tonne compared with $2,066 for the May contract the previous week.
Cocoa
Cocoa futures headed back to re- cent 2.5-year high points after some profit-taking. By Friday on LIFFE, cocoa for delivery in May rose to £1,861 a tonne from £1,848 a week earlier.
On ICE Futures US, cocoa for July stood at $2,985 a tonne compared with $2,919 for the May contract the previous week.
Sugar
Futures steadied amid a wellsupplied market, according to traders.
By Friday on LIFFE, the price of a tonne of white sugar for delivery in August stood at $468.10 com- pared with $460.90 for the May contract a week earlier.
On ICE Futures US, the price of unrefined sugar for May dipped to 17.05 US cents a pound from 17.20 US cents.
Rubber
Prices in Kuala Lumpur fell further as the ringgit strengthened against the US dollar, and on concerns over a supply glut amid soft demand, traders said.
The Malaysian Rubber Board’s benchmark SMR20 fell to 181.85 US cents a kilo from 185.95 cents a week earlier.