Sun, Jun 17, 2012 - Page 10 News List

Commodity prices diverge on eurozone strains, hopes

CHOPPY MARKETS:Oil prices ended mixed as OPEC vowed to rein in supply. Gold prices rose, but volumes remained low, while base metal prices mostly increased

AFP, LONDON

Coal miners fire a rocket during a clash with Spanish national riot police near El Soton coal mine in El Entrego, near Oviedo, northern Spain, on Friday. The miners were protesting against the government’s proposal to decrease funding for coal production.

Photo: Reuters

Commodity prices diverged this week as traders reacted to fresh eurozone turmoil and stimulus hopes ahead of crucial elections in Greece today.

Greece was readying for its second parliamentary vote in six weeks, with all the top candidates calling for various degrees of renegotiation of a bailout deal despite warnings that the country must toe the line or leave the euro.

Meanwhile, there were hopes that a recent string of weak US economic data would push the US Federal Reserve to unleash new stimulus to boost the flagging economy at its meeting on Tuesday and Wednesday.

“Volatile risk appetite, nervous sentiment, mixed macroeconomic data and global growth concerns have led to choppy commodity price moves” this week, Barclays Capital analyst Sudakshina Unnikrishnan said.

OIL: Oil prices were mixed after OPEC vowed to eliminate overproduction to stick by its output ceiling and boost its members’ revenue.

The organization decided on Thursday in Vienna to cut total production by 1.6 million barrels per day to meet the group’s 30 million barrels per day production ceiling.

Brent crude oil has tumbled from US$128 a barrel in early March to below US$100 on expectations of weaker demand caused by the eurozone’s troubles and a slowing Chinese economy.

By late Friday on London’s Intercontinental Exchange, Brent North Sea crude for August delivery stood at US$97.57 a barrel compared with US$97.70 for the expired July contract a week earlier.

On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for July rose to US$83.92 a barrel from US$82.86.

PRECIOUS METALS: Gold prices rose, but “volumes remain low and volatility elevated with market participants reluctant to take on large positions ahead of the Greek parliamentary elections,” said Andrey Kryuchenkov, an analyst at VTB Capital financial group.

By late Friday on the London Bullion Market, gold climbed to US$1,627.25 an ounce from US$1,576.50 a week earlier.

Silver gained to US$28.66 an ounce from US$28.17.

On the London Platinum and Palladium Market, platinum rose to US$1,493 an ounce from US$1,417.

Palladium advanced to US$632 an ounce from US$613 an ounce.

BASE METALS: Base metals prices mostly advanced over the week despite some subdued trading, which saw aluminum hit near two-year lows, with sentiment lifted late on by stimulus hopes.

The Hong Kong Stock Exchange on Friday announced that it had agreed to buy the London Metal Exchange for £1.39 billion (US$2.18 billion).

By late Friday on the London Metal Exchange, copper for delivery in three months jumped to US$7,516.50 a tonne from US$7,291 a week earlier.

Three-month aluminum slid to US$1,937 a tonne from US$1,979.

Three-month lead advanced to US$1,933.75 a tonne from US$1,900.25.

Three-month tin rose to US$19,700 a tonne from US$19,290.

Three-month nickel gained to US$16,750 a tonne from US$16,174.

Three-month zinc increased to US$1,907.25 a tonne from US$1,875.

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