Commodity prices rallied this week, with oil shooting to six-month peaks above US$66, boosted by a weak US dollar and increasing hopes of swifter-than-expected economic recovery, traders said.
“Commodity markets at large are continuing to benefit from improving sentiment and risk appetite, supported by a flow of increasingly positive macroeconomic data,” analysts at Barclays Capital said.
On Friday, traders digested official data showing that the recession-ravaged US economy — a major consumer of raw materials — shrank by 5.7 percent in the first quarter.
PHOTO: AP
However, that was less than the previous estimate of 6.1 percent contraction for the January-March period, and followed a brutal 6.3 percent drop in the fourth quarter of last year.
OIL: Crude oil rose, capping its biggest monthly gain in a decade, as the greenback weakened against the euro, bolstering the appeal of commodities.
Prices also gained as US, and Asian indicators pointed to a global economic recovery.
“The devaluation of the dollar is leading to the revaluation of energy and commodities in general,” said John Kilduff, senior vice president of energy at MF Global in New York. “This is a monetary-based rally. The market is focused on the future and ignoring the fundamentals of the present day crude-oil supply and demand picture.”
Crude oil for July delivery rose US$1.23, or 1.9 percent, to US$66.31 a barrel at 2:59pm on the New York Mercantile Exchange, the highest settlement since Nov. 4.
Oil advanced 30 percent in May, the biggest monthly increase since March 1999, when Asia was recovering from the 1997-1998 financial crisis. Prices climbed 7.5 percent this week and 49 percent this year.
“This rally is based more on hope than on fact,” said Adam Sieminski, the chief energy economist at Deutsche Bank AG in Washington. “The move has been more tied to rising consumer sentiment than market fundamentals.”
Prices are also rising because of declining US inventories. Crude-oil supplies fell 5.41 million barrels to 363.1 million last week, an Energy Department report showed yesterday. It was the biggest decrease since September. The drop left inventories 27 percent greater than the five-year average, up from a 23 percent surplus a week earlier.
OPEC predicted stronger demand as it decided yesterday to keep output quotas unchanged. OPEC agreed at three meetings last year that the 11 members with production quotas would reduce output by 4.2 million barrels a day.
Saudi Arabian Oil Minister Ali al-Naimi said OPEC opted not to alter its output targets because “prices are good, the market is in good shape.”
Brent crude for July settlement rose US$1.13, or 1.8 percent, to end the session at US$65.52 a barrel on London’s ICE Futures Europe exchange. It was the highest settlement since Nov. 4.
PRECIOUS METALS: Gold struck a three-month high of US$978.51 an ounce as the US currency fell in value, while silver reached a near 10-month high of US$15.59.
“Gold climbed further... as the dollar continued to weaken,” analysts at Barclays Capital said in a note to clients.
By late Friday on the London Bullion Market, gold rallied to US$975.50 an ounce from US$959.75 a week earlier.
Silver grew to US$15.52 an ounce from US$14.83.
On the London Platinum and Palladium Market, platinum climbed to US$1,175 an ounce at the late fixing on Friday from US$1,149.
Palladium gained to US$236 an ounce from US$234.
BASE METALS: Base metals prices mostly rose from a week earlier.
“Encouraging US macro data saw the metals strengthen,” analysts at Barclays Capital said.
By Friday on the London Metal Exchange, copper for delivery in three months climbed to US$4,790 a tonne from US$4,582 a week earlier.
Three-month aluminium fell to US$1,423 a tonne from US$1,437.
GRAINS AND SOYA: Soya and grains prices struck multi-month highs. By Friday on the Chicago Board of Trade, maize for delivery in July rose to US$4.33 a bushel from US$4.30 a week earlier.
July-dated soyabean meal — used in animal feed — increased to US$11.79 from US$11.66.
Wheat for July advanced to US$6.42 a bushel from US$6.12.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique