Commodity prices were mixed this week, heading toward the end of a year in which the values of raw materials such as oil and gold were determined largely by global economic strains and recovery hopes.
OIL: Oil prices rose in limited trading this week amid both the festive season and a stalemate in talks to avert the “fiscal cliff” of US tax hikes and spending cuts.
For next year, analysts predict a drop in oil demand growth which could weigh on high crude prices despite Middle East unrest.
Benchmark Brent crude oil futures have traded around US$110 a barrel for the past two months, benefiting major crude producers like Saudi Arabia and Iran, while putting a strain on main consumers the US and China.
Despite geopolitical tensions across the oil-rich Middle East, analysts said prices could drop next year should a world economic recovery falter.
Brent prices hit this year’s high of US$128.40 a barrel on March 1 amid escalating tensions over Iran’s alleged nuclear weapons program and the euro debt crisis before slumping in late June to US$88.49 because of weak demand expectations.
By Friday on the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for delivery in February rose to US$90.97 a barrel from US$88.40 a week earlier.
On London’s Intercontinental Exchange, Brent North Sea crude for February rose to US$110.72 from US$108.88 the prior week.
PRECIOUS METALS: Gold prices for next year were forecast to build on a 50 percent gain recorded this eyar.
“We continue to expect the precious metal to reach new record highs of at least US$2,000 [an ounce] in 2013,” said Julian Jessop, commodities analyst at Capital Economics research group.
“The monetary, regulatory and macroeconomic backdrops should still be positive, demand from China and India is likely to accelerate again, and central banks will probably continue buying,” he said.
By late Friday on the London Bullion Market, gold rose to US$1,657.50 an ounce from US$1,651.50 a week earlier.
Silver gained to US$30.15 an ounce from US$29.89.
On the London Platinum and Palladium Market, platinum dipped to US$1,527 an ounce from US$1,533. Palladium gained to US$704 an ounce from US$675.
BASE METALS: Base or industrial metals traded mixed at the end of a volatile year for prices. Losses early this year due to the eurozone debt crisis gave way to a rebound late on in the year thanks to US stimulus measures and improved Chinese economic data.
“Metals prices are likely to carry their momentum over into the new year, and continue their uptrend in 2013,” driven mainly by a global economic recovery, Commerzbank analysts said in a note to clients.
By late Friday on the London Metal Exchange, copper for delivery in three months rose to US$7,888 a tonne from US$7,802 a week earlier. Three-month aluminum slipped to US$2,067 per tonne from US$2,070, while three-month lead grew to US$2,325 a tonne from US$2,291.