World oil prices rallied this week, supported by a drop in US stockpiles, while traders on the metals markets took their lead from movements in the US dollar and Chinese data.
OIL: Crude futures rallied as data showed a much bigger-than-expected drop in US crude inventories, while OPEC said demand would pick up.
Oil prices had surged more than US$2 on Tuesday on expectations that the US inventory data would reveal a drop. The US Department of Energy indeed said that commercial stockpiles of US crude slumped by 6.8 million barrels last week to 470.6 million. Analysts’ consensus forecast had been for a drop of 1.45 million, according to Bloomberg.
A drop in US stockpiles is seen as an indicator of healthy demand in the world’s top crude consumer, supporting global prices. Meanwhile, OPEC stuck to its forecast that oil demand would pick up this year, but warned that oversupply might still keep a “ceiling” on crude prices, even as it kept on increasing its own output to a two-year high.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in July jumped to US$64.35 a barrel from US$61.15 a week earlier. On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for July increased to US$59.99 a barrel from US$57.54 a week earlier.
PRECIOUS METALS: Gold prices won support from its status as a haven investment amid heightened market tensions over Greece.
Analysts expect the precious metal to continue to win support from the buying of gold by central banks.
“We expect official purchases to be one of several factors that boost gold prices in the next year or two, despite the prospect of tighter US monetary policy and renewed strength in the US dollar against other major currencies,” analysts at Capital Economics said in a client note.
Silver dropped on weak Chinese demand prospects, traders said.
By Friday on the London Bullion Market, the price of gold gained to US$1,182.80 an ounce from US$1,164.60 a week earlier.
Silver fell to US$15.93 an ounce from US$16.15.
On the London Platinum and Palladium Market, platinum edged up to US$1,095 an ounce from US$1,092.
Palladium fell to US$739 an ounce from US$751.
BASE METALS: Base or industrial metals prices were mixed as traders responded to Chinese data.
Growth in China’s industrial production hit a three-month high last month, figures showed on Thursday, while expansion in retail sales rebounded from a nine-year low in cautiously positive signs for the world’s second-largest economy.
By Friday on the London Metal Exchange, copper for delivery in three months slipped to US$5,898.50 a tonne from US$5,919.50 a week earlier.
Three-month aluminum grew to US$1,748.50 a tonne from US$1,730, while three-month lead slid to US$1,852.50 a tonne from US$1,913 and three-month tin fell to US$14,940 a tonne from US$15,210.
Three-month nickel edged up to US$13,035 a tonne from US$12,905, while three-month zinc dipped to US$2,112.50 a tonne from US$2,137.50.
COCOA: Prices won support from tight supply worries in Ghana, the world’s second-biggest cocoa producer behind Ivory Coast.
By Friday on LIFFE, London’s futures exchange, cocoa for delivery in July stood at £2,094 a tonne, unchanged from the previous week.
On the ICE Futures US exchange, cocoa for July rose to US$3,109 a tonne from US$3,092.
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