Oil prices won support this week from fears of a US-led military strike against Syria, while commodity market traders also reacted also to uncertainty over the timing of the US Federal Reserve’s stimulus tapering.
US President Barack Obama and Russian counterpart Vladimir Putin failed on Friday to end their bitter dispute over US plans for military action in Syria, as half of the G20 called for a “strong” response to a chemical weapons attack blamed on the regime.
The US signaled that it had given up on securing Moscow’s support at the UN on the crisis, as Putin reiterated a warning that it would be “outside the law” to attack without the UN’s blessing.
Also occupying traders’ minds was news of disappointing US jobs growth last month, with the economy adding 169,000 jobs, the US Department of Labor reported on Friday, fewer than the 177,000 expected by analysts.
“Weaker-than-expected US labor market data casts doubt on [the] timing” of the Fed’s planned stimulus tapering, said Katie Evans, an economist at the Centre for Economics and Business Research in London.
OIL: Crude futures built on the previous week’s strong gains. as traders continued to plow money into crude on the back of escalating tensions over Syria.
Teoh Say Hwa, head of investment at Phillip Futures in Singapore, said the initial expression of support from the US Congress for a US-led attack had increased the likelihood of military action.
This has raised concerns “that the unrest may spread in the Middle East region, which accounts for a third of the world’s crude, and disrupts oil supplies,” she said.
New York crude had struck US$112.24 a barrel the previous week, which was the highest level since early May 2011. At the same time, Brent oil soared to US$117.34 a barrel, last seen in late February.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in October climbed to US$116.00 a barrel from US$114.74 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for September rose to US$110.16 a barrel, from US$108.02.
PRECIOUS METALS: The price of gold fell slightly over the week despite winning support from tensions over Syria.
By late Friday on the London Bullion Market, the price of gold fell to US$1,387 an ounce from US$1,394.75 a week earlier.
Silver slipped to US$23.05 an ounce from US$23.64.
On the London Platinum and Palladium Market, platinum dipped to US$1,498 an ounce from US$1,527, while palladium dropped to US$699 an ounce from US$741.
BASE METALS: Base or industrial metals were mixed amid Syria and US data.
Price falls among certain metals are “due primarily to the generally higher risk aversion among market players, the Syrian conflict in particular continuing to weigh on sentiment,” Commerzbank analysts said.
By Friday on the London Metal Exchange, copper for delivery in three months rose to US$7,135 a tonne from US$7,111.75 a week earlier, while three month aluminum fell to US$1,817 a tonne from US$1,820.
Three-month lead declined to US$2,145.25 a tonne from US$2,162.
Three-month tin rose to US$22,675 a tonne from US$21,150.
Three-month nickel increased to US$13,933 a tonne from US$13,864, while three-month zinc slipped to US$1,887.75 a tonne from US$1,905.25.