Brent oil prices soared above US$61 this week for the first time this year, aided by upbeat news on Ukraine and Greece and by rebounding economic growth in eurozone powerhouse Germany.
Elsewhere in commodity markets, India overtook China as the world’s top consumer of gold, according to newly published industry data.
Crude oil “prices managed to climb ... as investors reacted positively to the announcement of a ceasefire between Russia and Ukraine after talks mediated by Germany and France proved successful,” Sucden analyst Myrto Sokou said. “Appetite for risk assets was boosted further by the progress between Greece and its creditors regarding any potential renegotiation of the bailout package.”
European stock markets also jumped higher on Friday, with Germany’s main index breaching 11,000 points for the first time as Greece appeared closer to a possible overhaul of its international bailout.
Sentiment was given another boost as official data showed the German economy expanded surprisingly strongly in the fourth quarter last year, driven by robust consumer spending.
In the period from October to December, German GDP expanded by 0.7 percent, bringing full-year growth to 1.6 percent.
Economic activity in the eurozone also picked up slightly, expanding by 0.3 percent in the fourth quarter and 0.9 for all of last year.
Crude futures had risen sharply on Thursday, gaining almost US$2.5 on reports that leading petroleum producers are curtailing investment.
In a topsy-turvy week for the oil market, prices fell sharply on Wednesday, with New York crude sliding to less than US$49 as swelling US inventories added to the global supply glut.
The US stockpiles report showed crude reserves standing at an 80-year high for this time of the year.
Oil prices have been under pressure for months, plunging about 60 percent to just over US$40 between June and late last month.
However, they have recovered slightly in recent weeks as the number of drilling rigs has fallen and oil companies such as Total and Royal Dutch Shell trimmed some investment.
Crude futures also shot higher last week as data revealed production cuts that could curb the global supply glut.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in April leaped to US$61.19 a barrel from US$58.08 for next month’s contract one week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for next month rallied to US$52.70 a barrel compared with US$50.48.
PRECIOUS METALS: gold prices fell, as many investors shunned the safe haven asset amid easing global tensions, while India overtook China as the top world consumer of the metal.
“Gold has come under pressure from various sources, not least due to the lack of safe haven demand,” trading site Forex.com analyst Fawad Razaqzada said.
Overall gold demand dropped 4 percent last year to 3,924 tonnes compared with a record amount in 2013, pushed lower as Chinese jewelery demand tumbled by a third.
That marked the lowest overall level in five years and was also the third successive annual decline for the precious metal, whose two main drivers are jewelery and investment buying.
By Friday on the London Bullion Market, the price of gold dropped to US$1,232.5 an ounce from US$1,241 a week earlier.
Silver slid to US$16.86 an ounce from US$17.22.
On the London Platinum and Palladium Market, platinum decreased to US$1,201 an ounce from US$1,239.
Palladium was unchanged at US$786 an ounce.
BASE METALS: Base or industrial metal prices also won a boost from easing worries over Greece and Ukraine, and bright economic growth in Germany and the eurozone.
“High levels of risk appetite among market participants significantly drove up equity markets and — in conjunction with a sharp increase in oil prices — also contributed to higher metal prices,” Commerzbank analysts said.
Investors still need reassuring over China’s economic slowdown and stubborn concerns over the potential exit of Greece from the eurozone, dealers said.
By Friday on the London Metal Exchange, copper for delivery in three months rose to US$5,717.5 a tonne from US$5,677.50 a week earlier.
Three-month aluminum dipped to US$1,847 a tonne from US$1,878.5, three-month lead increased to US$1,840 a tonne from US$1,795.8 and three-month tin declined to US$17,445 a tonne from US$18,225.
Three-month nickel rose to US$14,710 a tonne from US$14,480, while three-month zinc advanced to US$2,105.5 a tonne from US$2,080.
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