Sun, Oct 16, 2011 - Page 10 News List

Oil prices soar on hopes of resolution to euro crisis

AFP, LONDON

World oil prices surged this week, in line with a host of other commodities, as sentiment was boosted by hopes of a swift resolution to the long-running sovereign debt crisis in the eurozone.

“The oil markets gained ground this week partly due to renewed hope for the European economy, while a fair share of supply side noise also helped buoy prices,” Barclays Capital analyst Sudakshina Unnikrishnan said.

Traders remain on edge over the eurozone debt drama, amid concern that it could spark another sharp economic downturn and slash global demand for energy and other major raw materials.

OIL: Brent oil spiked on Friday to a three-week peak at US$114.78, lifted by a weaker dollar, rising equities and hopes that the weekend G20 finance gathering will make progress towards resolving the eurozone debt drama.

“Oil prices have rebounded on the firmer tone in equity markets, boosted by the perception of progress in Europe and firmer US economic data,” CMC Markets analyst Michael Hewson said.

The crude market had soared on Monday after German Chancellor Angela Merkel and French President Nicolas Sarkozy agreed to deliver a comprehensive solution within weeks.

European Commission President Jose Manuel Barroso meanwhile urged European banks to be “urgently” recapitalized amid concern over their exposure to peripheral eurozone members.

Oil prices then slid on Wednesday, after a five-day run-up, as traders eyed demand forecast downgrades from both the International Energy Agency and the OPEC oil cartel.

The market diverged on Thursday as traders fretted about slowing demand in China, the world’s biggest energy consumer, after official data showed that its trade surplus narrowed for a second straight month.

By late Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in November had rallied to US$114.18 a barrel from US$105.86 a week earlier.

On the New York Mercantile Exchange, West Texas Intermediate, or light sweet crude, for November, jumped to US$86.51 from US$82.82.

PRECIOUS METALS: Prices mostly rose in value.

By late Friday on the London Bullion Market, gold rose to US$1,678 an ounce from US$1,652 the previous week.

Silver eased to US$31.82 an ounce from US$31.98.

On the London Platinum and Palladium Market, platinum increased to US$1,553 an ounce from US$1,529.

Palladium advanced to US$614 an ounce from $609.

BASE METALS: Industrial metals enjoyed mixed fortunes on disappointing economic data from key consumer China.

China’s politically sensitive trade surplus fell to US$14.51 billion last month as exports slowed sharply, hit by economic turmoil in the US and Europe, official data showed.

By late Friday on the London Metal Exchange, copper for delivery in three months rebounded to US$7,511 a tonne from US$7,348 the previous week.

Three-month aluminum eased to US$2,216 a tonne from US$2,230.

Three-month lead rose to US$2,026 a tonne from US$1,963.

Three-month tin decreased to US$21,950 a tonne from US$22,925.

Three-month zinc leapt to US$1,921 a tonne from US$1,897.

Three-month nickel dipped to US$18,851 a tonne from US$19,030.

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