The commodity markets were roiled this week this week as a severe disruption to global air travel impacted supply and demand for raw materials such as oil and metals, analysts said.
A volcanic eruption in Iceland spewed ash across Europe, forcing airplanes from the skies for safety reasons, with the industry badly hit and only getting back on its feet by Friday.
OIL: Oil prices ended the week in negative territory at the end of a volatile week marked by the unprecedented closure of European airspace and data showing sagging demand in key energy consumer the US.
Prices slumped almost US$2 on Monday amid continued concerns over fraud charges against Wall Street icon Goldman Sachs and the closure of European airports.
The market bounced back on Tuesday, rising dramatically on the back of optimism about the state of the economy and the prospect of air travel resuming.
Traders reacted to a pickup in jet fuel demand as planes increasingly took to the skies while stellar Goldman Sachs first-quarter earnings also boosted the market given the company’s positive outlook on the economy.
News that US crude reserves increased 1.9 million barrels in the week ending April 16, against market expectations for a drop of 200,000 barrels, sparked fresh concerns about underlying demand in the world’s biggest energy user.
“It does put some doubt into the fact that the market won’t move back into balance,” said Ben Westmore, minerals and energy economist for the National Australia Bank in Melbourne. “It’s arguable whether [oil above US$80] is really justified given the very weak fundamentals.”
By late Friday on the New York Mercantile Exchange, Texas light sweet crude for delivery in June eased to US$83.96 from US$84.08 last week.
On London’s IntercontinentalExchange, Brent North Sea crude for June delivery slipped to US$86.22 from US$86.53 for the May contract a week earlier.
PRECIOUS METALS: Palladium prices hit the highest level in more than two years.
“Palladium prices set fresh 25-month highs as investment hits new record and China’s imports remain robust,” Barclays Capital analyst Suki Cooper said.
Gold meanwhile failed to hold on to gains made at the start of the week when the dollar had slid.
By late Friday on the London Bullion Market, gold dropped to US$1,139.50 an ounce from US$1,151.50 the previous week.
Silver slid to US$17.89 an ounce from US$18.34.
On the London Platinum and Palladium Market, platinum rose to US$1,725 an ounce from US$1,708.
Palladium jumped to US$555 an ounce from US$532.
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