Sun, Feb 10, 2013 - Page 6 News List

Brent oil surges to nine-month peak near US$120

DEFYING GRAVITY:Brent North Sea oil hit a series of multi-month highs and climaxed on Friday on strong China trade figures and Iran’s rejection of nuclear talks

AFP, LONDON

Brent oil prices surged to a nine-month peak near US$120 this week as traders seized on healthy data from top energy consumer China, global economic optimism, and geopolitical jitters in Iran and elsewhere.

China’s trade surplus rose 7.7 percent year-on-year to US$29.2 billion last month as the country maintained its economic recovery on improving global demand, official data showed on Friday. Exports jumped 25.0 percent to US$187.4 billion last month, while imports soared 28.8 percent to US$158.2 billion, the General Administration of Customs said in a statement.

“Brent oil prices continue to defy gravity pushing to nine-month highs after this morning’s Chinese data,” CMC Markets analyst Michael Hewson said. “There is a worry though at some point that the high price will act as a drag on demand which could well translate into difficulty in pushing through the US$120 mark.”

Some commodities experienced subdued trade heading into the Lunar New Year holiday, which begins today.

OIL: Brent North Sea oil hit a series of multi-month high points and climaxed on Friday at US$119.17 per barrel — a price last seen on May 2, last year.

In contrast, New York crude fell in value as an extended US refinery outage revived concerns about a glut of crude sitting in the middle of the US, which is the world’s biggest consumer of oil.

“Sentiment was boosted thanks to China’s strong trade figures,” GFT analyst Fawad Razaqzada said. “In addition, China imported more than 25 million metric tonnes of crude oil in January, which was some 7.4 percent higher than a year earlier.”

The market also won support from geopolitical concerns, particularly after crude producer Iran rejected a US offer on nuclear talks.

“Along with improved macroeconomic sentiment providing a floor, the upward momentum for prices continues to build upon various geopolitical heat elements becoming more intense and frequent,” Barclays analyst Miswin Mahesh said.

The growing hostility between Washington and Tehran has strengthened the Brent contract as the international oil benchmark by raising fears that oil supplies could be affected.

By Friday on the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for delivery in March fell to US$96.15 a barrel from US$97.24 a week earlier. On London’s Intercontinental Exchange, Brent North Sea crude for March jumped to US$118.96 a barrel compared with US$116.82 the previous week.

PRECIOUS METALS: Gold fell as the US dollar strengthened against the euro in the wake of cautious comments from the European Central Bank.

By late on Friday on the London Bullion Market, gold dipped to US$1,668.25 an ounce from US$1,669 a week earlier.

Silver increased to US$31.52 an ounce from US$31.43.

On the London Platinum and Palladium Market, platinum rose to US$1,714 an ounce from US$1,687.

Palladium firmed to US$746 an ounce from US$745.

BASE METALS: Industrial metals enjoyed mixed fortunes despite the upbeat Chinese data.

By late Friday on the London Metal Exchange, copper for delivery in three months declined to US$8,279 a tonne from US$8,304 a week earlier.

Three-month aluminum eased to US$2,116 a tonne from US$2,122.

Three-month lead dropped to US$2,419 a tonne from US$2,460.

COFFEE: Coffee futures diverged as traders tracked the mixed supply outlook.

“The two coffee classes continued to diverge value-wise in a choppy week amid mixed news on the Latin American and Asian supply fronts,” trade magazine the Public Ledger said. “Whereas Arabica saw their lowest front month close this year, Robusta managed to nudge their mid-October highs.”

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