Commodity prices diverged this week as investors reacted to the Greek debt crisis that has affected major financial markets, traders said.
OIL: Oil prices rose over the week after a topsy-turvy week amid uncertainty over a Greek bailout.
Prices sunk at the start of the week on heightened concerns about a Greek financial crisis after its debt was slashed to junk status, fanning fears of a default.
The oil market was “sharply pressurised by rising concerns over Greece’s debt problems,” analysts at Barclays Capital said.
A fierce global equities sell-off began on Tuesday after ratings agency Standard & Poor’s (S&P) cut Greek debt to junk, while a downgrade to Portugal also stoked concerns about a widening eurozone crisis.
Crude futures recovered late in the week as fears about Greece eased.
In other news affecting energy market sentiment, the White House indicated that new domestic offshore oil drilling will be on hold until the investigation of a Gulf of Mexico disaster is complete.
British energy giant BP said it was “taking full responsibility” for the oil spill, adding it would pay for “legitimate claims” stemming from the disaster.
By late Friday on the New York Mercantile Exchange, Texas light sweet crude for delivery in June jumped to US$85.62 from US$83.96 a week earlier.
On London’s IntercontinentalExchange, Brent North Sea crude for June delivery climbed to US$87.03 compared with US$86.22.
PRECIOUS METALS: Gold prices reached the highest level this year at US$1,181.75 an ounce.
“Safe haven buying continued to buoy prices following S&P’s downgrading of Spain’s credit rating,” Barclays Capital analyst Suki Cooper said.
By late Friday on the London Bullion Market, gold climbed to US$1,179.25 an ounce from US$1,139.50 the previous week.
Silver gained to US$18.62 an ounce from US$17.89.
On the London Platinum and Palladium Market, platinum rose to US$1,738 an ounce from US$1,725.
Palladium dipped to US$552 an ounce from US$555.
BASE METALS: Base metals prices fell across the board “as on-going uncertainties over the Greek debt situation and potential contagion effects weighed on broad market sentiment,” Barclays Capital analyst Nicholas Snowdon said.
By Friday on the London Metal Exchange, copper for delivery in three months fell to US$7,399 a tonne from US$7,740 a week earlier.
Three-month aluminum dropped to US$2,207 a tonne from US$2,312.
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