Commodity markets mainly fell this week, as traders weighed poorly received Chinese and US economic data against the crisis in Ukraine and unrest in oil-producing Libya.
The US Department of Commerce on Friday reported that consumer spending, the largest driver of the world’s biggest economy, fell by US$9.1 billion last month, or 0.1 percent, following the US$120.2 billion rise the previous month.
OIL: Crude futures dropped after recent gains, but signs of stronger US gasoline demand and escalating tensions in Ukraine and Libya provided support, analysts said.
Photo: Reuters
Crude futures had jumped to multimonth peaks the previous week as traders reacted to tumbling crude reserves in the US.
The US Department of Energy’s weekly oil report on Thursday showed overall US inventories rising, but gasolin supplies falling in the week ended May 23.
Robert Yawger of Mizuho Securities USA said it appeared that the market got “a little bit” ahead of itself in aggressive buying last week after a bullish Department of Energy number on US crude inventories.
Traders are also tracking the escalating fighting between government troops and separatist rebels in Ukraine, a major pipeline conduit for Russia’s natural gas exports to Europe.
Investors fear a full-blown conflict in the ex-Soviet state will disrupt supplies and send energy prices soaring.
Political uncertainty in oil-rich Libya was also in focus. A renegade general’s bid to rid the country of Islamists has alarmed oil investors fearing a further crippling of the embattled North African state’s output, which has been stunted until recently owing to rebel blockades.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in July dropped to US$109.39 a barrel from US$110.39 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for July fell to US$102.72 a barrel compared with US$104.39 a week earlier.
PRECIOUS METALS: Gold futures dropped to the lowest level in almost four months on weaker Chinese demand, while palladium hit a near four-year high owing to strikes in South Africa.
“Unless the recently subdued physical demand in Asia picks up again, the gold price risks falling even further, so attention will be focused on China and India, the two most important countries in terms of demand,” Commerzbank analysts said in a note to clients.
Meanwhile, palladium reached US$845.25 an ounce on Wednesday, the highest point since August 2011.
South Africa, which supplies nearly a third of the world’s palladium, has been hit by long-running strikes at its mines.
By Friday on the London Bullion Market, the price of gold slid to US$1,250.50 an ounce from US$1,291.50 a week earlier.
Silver decreased to US$19.00 an ounce from US$19.42.
On the London Platinum and Palladium Market, platinum slid to US$1,464 an ounce from US$1,483.
Palladium rose to US$836 an ounce from US$828.
BASE METALS: Aluminum rose, but other key industrial metals headed south this week amid poorly received Chinese economic data.
“Strong growth in demand and supply bottlenecks will offer some support to aluminum prices ... this year, despite a backdrop of Chinese overproduction and high global stocks,” said Caroline Bain, senior commodities economist at Capital Economics research group.
Other base metals dropped on concerns about weaker Chinese demand.
“Government figures indicated manufacturing growth was weakening, contradicting recent signs of improvement in the economy and providing an excuse for some selling in raw materials,” analyst Chris Beauchamp at traders IG said.
By Friday on the London Metal Exchange, copper for delivery in three months fell to US$6,867.75 a tonne from US$6,924.75 a week earlier.
Three-month aluminum gained to US$1,851.25 a tonne from US$1,820, while three-month lead fell to US$2,103 a tonne from US$2,153.50.
Three-month tin declined to US$23,120 a tonne from US$23,259; three-month nickel decreased to US$19,192 a tonne from US$19,622; and three-month zinc slid to US$2,060 a tonne from US$2,097.25.
COCOA: Prices reached near three-year highs on speculative buying.
Cocoa reached ￡1,952 a tonne in London and US$3,082 a tonne in New York — the highest points since September 2011.
By Friday on LIFFE, London’s futures exchange, cocoa for delivery in July jumped to ￡1,951 a tonne from ￡1,878 a week earlier.
On the ICE Futures US exchange, cocoa for July rose to US$3,079 a tonne from US$2,991.
COFFEE: The coffee market fell further owing to ample supplies.
On ICE Futures US, Arabica for delivery in July dropped to US$1.7785 a pound (0.45kg) from US$1.8135 a week earlier.
On LIFFE, Robusta for July reversed to US$1,920 a tonne from US$2,007.
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