Sun, Jan 08, 2012 - Page 10 News List

Commodities hit by strong greenback; oil up on Iran


US Commodity markets were roiled this week as the dollar surged against the beleaguered euro and oil prices spiked close to eight-month highs on simmering tensions over key crude producer Iran.

OIL: Prices rose sharply this week as the EU moved closer to an Iran oil embargo and Tehran warned the US to remove its naval forces from the Persian Gulf.

New York’s light sweet crude jumped on Wednesday as high as US$103.74 per barrel, a level last seen on May 11 last year. London Brent oil on Thursday hit US$114.64, its highest since Nov. 14.

“Fresh fears of a military confrontation that would endanger the flow of crude through the Strait of Hormuz have rattled oil markets since the start of the year,” Barclays Capital said in a market commentary. “As Iran ratchets up its anti-Western rhetoric and military exercises, the West continues to tighten its stringent sanctions against the country.”

Prices trimmed gains on Thursday as US stockpiles unexpectedly rose, raising concerns about weak demand in the world’s biggest oil-consuming nation. US crude reserves jumped 2.2 million barrels in the week ending Dec. 30.

By late Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in February jumped to US$112.50 compared with US$107.02 a week earlier.

On the New York Mercantile Exchange, West Texas Intermediate for February stood at US$101.35, up from US$98.99.

PRECIOUS METALS: Gold attracted fresh support, rising as the precious metal’s status as a safe haven in times of economic and geopolitical turmoil drew investors.

“Gold appears relatively immune to the current strength of the US dollar,” Commerzbank analysts said in a research note. “Clearly, gold is becoming increasingly attractive again in view of the geopolitical risks and smoldering sovereign-debt crisis in the eurozone.”

By late Friday on the London Bullion Market, gold jumped to US$1,616.50 an ounce from US$1,574.50 the previous week.

Silver rose to US$29.40 an ounce from US$28.18.

On the London Platinum and Palladium Market, platinum gained to US$1,410 an ounce from US$1,381.

Palladium eased to US$632 an ounce from US$636.

BASE METALS: Base or industrial metals were mixed in subdued trade.

“Metals are mixed in relatively featureless trading, while oil prices are higher as tension with Iran continues,” analyst Ed Meir at US-based brokerage INTL FCStone said.

By late Friday on the London Metal Exchange, copper for delivery in three months fell to US$7,485 a tonne from US$7,555 the previous week.

Three-month aluminum firmed to US$2,037 a tonne from US$2,003.

Three-month lead decreased to US$1,959 a tonne from US$2,007.

Three-month tin rose to US$19,650 a tonne from US$18,900.

Three-month zinc retreated to US$1,829 a tonne from US$1,857.

Three-month nickel advanced to US$18,610 a tonne from US$18,360.

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