Commodities diverged this week as investors digested a radical shake-up of eurozone interest rates, while cocoa hit a three-year high on speculative buying.
Some markets took a hit from the strong greenback, which struck a four-month high against the euro after the European Central Bank (ECB) cut key lending rates to all-time lows.
The unprecedented moves were aimed at bolstering fragile eurozone growth and preventing deflation, but also boosted hopes of rebounding demand for commodities.
On Friday, data showed upbeat US jobs growth last month, adding a better-than-expected 217,000 jobs, stoking demand expectations in the world’s biggest economy.
OIL: The global oil market held steady as supply worries eased over the Ukraine crisis, but Brent briefly touched a one-month low after the surprise ECB news.
“Brent tested a low at US$107.7 per barrel ... due to nervous trading conditions surrounding the ECB interest rate decisions,” Sucden Financial Ltd analyst Myrto Sokou said. “However, the ECB confirmed its view by cutting all three of its interest rates at its policy meeting [and by] also introducing a new series of measures to boost the sluggish European economies. The optimistic news raised hopes about a strong rebound in the oil demand from eurozone amid signs of higher economic growth in the region.”
Crude futures edged lower due to easing G7-Russia tensions over the Ukraine crisis, as well as plentiful global supply, analysts said.
Russian President Vladimir Putin returned to the international center stage on Thursday after being granted his first meetings with Western leaders since the crisis.
The meeting comes as he says he is ready to meet Ukrainian President Petro Poroshenko, raising hopes of an easing in the worst East-West standoff since the Cold War.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery next month dipped to US$108.77 a barrel from US$109.39 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate, or light sweet crude, for next month firmed to US$102.73 compared with US$102.72 a week earlier.
PRECIOUS METALS: Gold attempted to rally following the ECB news, but ran out of steam heading into the weekend.
Meanwhile, palladium hit another four-year high due to strikes in South Africa. It reached US$845.60 an ounce on Wednesday, the highest point since August 2011.
By Friday on the London Bullion Market, the price of gold eased to US$1,247.50 an ounce from US$1,250.50 a week earlier, while silver rose to US$19.03 from US$19.
On the London Platinum and Palladium Market, platinum slid to US$1,453 an ounce from US$1,464 and palladium rose to US$840 from US$836.
COCOA: Prices struck three-year highs on the back of speculative buying of the commodity that is mostly used to make chocolate.
“More long speculators are moving into the market,” Citigroup analyst Sterling Smith said, but added that favourable weather in key producing nations would push prices lower in the longer term.
Cocoa reached ￡1,965 per tonne in London, while also hitting US$3,104 a tonne in New York, a level last seen in August 2011.
By Friday on LIFFE, London’s futures exchange, cocoa for next month hit ￡1,959 a tonne from ￡1,951 a week ago. On the ICE Futures US exchange, cocoa rose to US$3,097 a tonne from US$3,079.