Oil and metals prices mostly rose this week as traders reacted to mixed Chinese economic data and positive figures from the US, while maize and soya futures jumped on drought conditions.
OIL: Crude oil prices hit three-month highs before easing off Friday in the wake of disappointing Chinese trade data and a downgrade to crude demand growth by the International Energy Agency.
Prices had been in strong form up until then, reaching a three-month high on Thursday at US$113.52 a barrel in London on buoyant US jobs data, a hike in OPEC’s crude demand growth forecast and some positive figures out of China. However, prices retreated on Friday as official data showed China’s exports and imports slowed for the second consecutive month last month.
By late Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in September was up at US$111.84 from US$108.58 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for September climbed to US$92.30 from US$91.02.
PRECIOUS METALS: Gold led the complex higher.
“Gold stands to benefit from monetary easing. Higher liquidity, inflation expectations and a depreciating US dollar are all positive factors for the balance of the year,” BNP Paribas analyst Anne-Laure Tremblay said.
By late Friday on the London Bullion Market, gold rose to US$1,618.50 an ounce from US$1,602 a week earlier. Silver climbed to US$27.88 an ounce from US$27.25.
On the London Platinum and Palladium Market, platinum edged up to US$1,399 an ounce from US$1,390.
Palladium rose to US$578 an ounce from US$573 an ounce.
BASE METALS: Prices mainly rose over the week despite some late profit-taking.
By late Friday on the London Metal Exchange, copper for delivery in three months grew to US$7,440 a tonne from US$7,384 a week earlier. Three-month aluminum rose to US$1,877 a tonne from US$1,854. Three-month lead gained to US$1,898 a tonne from US$1,875. Three-month tin increased to US$17,785 a tonne from US$17,750. Three-month nickel fell to US$15,305 a tonne from US$15,528. And three-month zinc increased to US$1,842 a tonne from US$1,827.
GRAINS AND SOYA: Maize and soya prices rose strongly as the US on Friday slashed production estimates for its globally crucial crops, saying the record heat across the country’s farm belt had cut expected output to a six-year low.
The curtailed production will likely send maize and soybean prices to record highs, the US Department of Agriculture said.
The US drought has already fed into world food prices. The Food and Agriculture Organization’s global food price index jumped 6 percent last month after declining for three months, it said on Thursday.
On Friday, FAO chief Jose Graziano da Silva urged the US to stop turning maize and other crops into biofuels like ethanol to mitigate the sharp rise in food prices.
“The US drought leaves global markets highly vulnerable to any further supply side shocks,” da Silva wrote in the Financial Times.
By Friday on the Chicago Board of Trade, maize for delivery in December jumped to US$8.18 a bushel from US$8.07 a week earlier.
November-dated soyabean meal rallied to US$16.53 a bushel from US$16.28.