Sun, Jun 21, 2015 - Page 15 News List

Commodities suffer volatile week; all eyes on Greece


Commodities experienced a volatile week, as traders eyed the oil supply glut, the US dollar and intensifying concerns that Greece could default and crash out from the eurozone.

OIL: Crude oil prices weakened as the dollar, benefitting from Greek worries, rose against the euro.

“Prices danced to the tune of the dollar/euro exchange, which has been influenced by the latest Greek developments,” analysts at London-based oil brokerage PVM said.

Greece insists a last-ditch deal on its debt is possible, while the European Central Bank held an emergency meeting on Friday to increase its financial lifeline Greek lenders as fears grew of a run on Greek banks after a rush of deposit withdrawals.

The European single currency fell on Friday to US$1.1334. However, on Thursday the euro had struck a one-month peak at US$1.1436 in a jump driven by incorrect reports that Greece had won a delay in its debt payments.

Meanwhile, the oil market rose on Thursday as dealers reacted to the US Federal Reserve’s decision the previous day to leave its key interest rate unchanged.

Elsewhere, investors remain concerned that top producer and OPEC leader Saudi Arabia could boost output in an already oversupplied market, analysts said.

By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in August slid to US$62.66 a barrel from US$64.35 a week earlier for the expired July contract. On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for July dipped to US$59.40 a barrel from US$59.99 a week earlier.

PRECIOUS METALS: Gold gained ground as dealers sought shelter from Greek default worries and mulled the cautious US interest rate outlook.

“Ahead of key events for Greece, the ultimate safe haven, gold, is finding some buyers,” IG analyst Chris Beauchamp said.

“Consolidation above US$1,200 is a good first step if the metal is to attempt to regain the May highs, and a deterioration in the Greek situation should provide some modest upward force for the metal,” he said.

By Friday on the London Bullion Market, the price of gold gained to US$1,203.40 an ounce from US$1,182.80 a week earlier.

Silver advanced to US$16.12 an ounce from US$15.93.

On the London Platinum and Palladium Market, platinum edged down to US$1,085 an ounce from US$1,095, and palladium fell to US$718 an ounce from US$739.

BASE METALS: Prices mostly fell on Greek woes and Chinese demand concerns.

“The escalating crisis surrounding Greece’s negotiations with its creditors and its potentially negative implications for the eurozone economy weighed on investor sentiment this week,” Jessop at Capital Economics said.

By Friday on the London Metal Exchange, copper for delivery in three months fell to US$5,667.50 a tonne from US$5,898.50 a week earlier, while three-month aluminum reversed to US$1,690.50 a tonne from US$1,748.50.

Three-month lead declined to US$1,792 a tonne from US$1,852.50; three-month tin rose to US$15,210 a tonne from US$14,940; and three-month nickel edged down to US$12,620 a tonne from US$13,035.

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