Commodity markets traded mixed this week as dealers reacted to a renewed escalation of tensions over the Ukraine crisis and metrological developments.
Many markets began the week on Tuesday following the Easter break that cut short the previous week’s trading.
OIL: Crude futures diverged as traders weighed increased worries over the Russia-Ukraine standoff against data showing that US crude stockpiles are at an all-time high.
Standard and Poor’s downgraded its rating of Russia’s ability to repay debt as alarm grew over the effects of the crisis on the country’s economy amid increased capital flight and slumping growth.
The Bank of Russia also hiked interest rates by half-a-percentage-point to curb inflation, which could then help limit capital flight and pressures on the ruble.
Kiev on Friday accused Moscow of seeking a “third world war” as tensions soared in eastern Ukraine and US President Barack Obama led a diplomatic charge against Russia.
As a major conduit for Russian natural gas exports to Western Europe, Ukraine is monitored closely by investors fearing that a full-scale armed conflict will disrupt supplies and send energy prices soaring.
Counterbalancing the Eastern Europe strains, the US Department of Energy on Wednesday said commercial crude oil stocks rose 3.5 million barrels to 397.7 million barrels for the week ended on April 18.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for June nudged higher to US$109.46 a barrel from US$109.44 on April 17.
On the New York Mercantile Exchange, West Texas Intermediate, or light sweet crude, for June stood at US$100.76 a barrel compared with US$103.85 for next month.
PRECIOUS METALS: Prices steadied after briefly sliding to multi-month lows on Thursday.
“Gold has broken through the US$1,300 barrier today as the precious metal benefitted from a flight to quality. As long as the situation in Ukraine remains tense, the metal will be in demand,” IG market analyst David Madden said.
However, on Thursday, prices “were trading sharply lower first thing... as investors again showed a greater appetite for equities over the safe-haven metals after earnings results from Apple and Facebook both came in much better than expected,” Forex.com technical analyst Fawad Razaqzada said.
By Friday on the London Bullion Market, the price of gold edged up to US$1,301.25 an ounce from US$1,299 on April 17, while silver rose to US$19.66 an ounce from US$19.62 over the same period.
On the London Platinum and Palladium Market, platinum fell to US$1,418 an ounce from US$1,437, as palladium rose to US$805 from US$801.
COFFEE: Arabica-quality coffee hit a 26-month high point, supported by drought conditions in major producer Brazil.
New York prices reached US$0.219 on Thursday — the highest point since February 2012.
By Friday on the ICE Futures US exchange, arabica for July rose to US$0.21115 a pound (0.45kg) from US$0.19180 on April 17.
On LIFFE, London’s futures exchange, Robusta for July gained to US$2,156 a tonne from US$2,086.
RUBBER: Prices in Kuala Lumpur fell further on weak demand from top buyer China.
The Malaysian Rubber Board’s benchmark SMR20 slipped to US$0.17085 a kilo from the US$0.18160 seen a week earlier.
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