Sun, Dec 01, 2013 - Page 15 News List

Commodity markets dip amid Iran nuclear deal

AFP, LONDON

Commodities mostly fell this week as traders reacted to geopolitical events in the Middle East — particularly Iran’s breakthrough nuclear deal with world powers.

Markets also ended the week on a subdued note amid Thursday’s Thanksgiving holiday in the US.

OIL: World oil prices slid on Monday after a US-led deal was struck between world powers and Iran over Tehran’s controversial nuclear program.

Brent North Sea crude shed more than US$2 at one stage after major oil producer Iran agreed on Nov. 24 to curb its nuclear program for the next six months in exchange for limited sanctions relief. The preliminary accord with world powers was expected to lay the foundations for a comprehensive agreement later this year.

“What we see ... is a downward correction of prices after the deal,” said Victor Shum of IHS Purvin and Gertz consultants.

“The impact of the deal on global oil supply will however be limited since much of the sanctions continue to remain in place,” he said.

The oil market rebounded slightly on Wednesday after official data revealed a smaller-than-expected increase for US commercial crude inventories, indicating soft demand in the world’s biggest economy.

The US Department of Energy said that US crude inventories grew by 1.6 million barrels last week, less than expectations for a rise of 1.9 million barrels.

Oil prices remain pressured by the sustained rise in official crude stockpiles over the past 10 weeks.

Elsewhere, concerns over escalating political strife in Libya continued to drive European benchmark Brent crude.

Four soldiers and at least 10 people were killed on Thursday during violence in the North African state in the aftermath of a three-day strike in protest over militias.

By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in January firmed to US$110.93 a barrel from US$110.33 a week earlier.

On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for January sank to US$93.58 a barrel from US$94.69.

PRECIOUS METALS: Gold slid on Monday to its lowest point for four-and-a-half months, as investors shunned the safe-haven metal amid easing concerns over Iran.

“Gold temporarily dipped to a 4.5-month low of US$1,225 per troy ounce as the new week of trading got underway,” Commerzbank analysts said.

“This is doubtless due first and foremost to reduced geopolitical risks following a breakthrough in the nuclear talks between the West and Iran,” they said.

By late Friday on the London Bullion Market, the price of gold rose to US$1,253 an ounce from US$1,246.25 a week earlier.

Silver held steady at US$19.93 an ounce.

On the London Platinum and Palladium Market, platinum slipped to US$1,376 an ounce from US$1,396.

Palladium increased to US$724 an ounce from US$721.

BASE METALS: Industrial metals followed oil lower after the Iranian deal, and amid the Thanksgiving break.

“Ahead of the US Thanksgiving holiday on Thursday, the base metals markets have been quiet, with participants happy to sit on the sidelines,” Standard Bank analyst Leon Westgate said.

“As a consequence, turnover has been pretty subdued, while prices have also tended to edge sideways with the metals trading in fairly limited intraday ranges,” he said.

By Friday on the London Metal Exchange, copper for delivery in three months dipped to US$7,068 a tonne from US$7,077.77 a week earlier.

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