LONDON, May 29, (AFP): Commodity prices mostly recovered this week on easing worries about the eurozone debt crisis, with cocoa striking a 32-year high level.
“Commodity prices have picked up in recent days in the wake of the rather indiscriminate selling that dragged prices lower in recent weeks,” said Barclays Capital analyst Sudakshina Unnikrishnan.
“Macro-economic related fears remain but after causing the steep decline in prices, are now taking a bit of a backseat as commodity (supply and demand) fundamentals reaffirm themselves.
“Crude oil prices have gained with the continuation of supportive US oil demand data; base metals remain more mixed; precious metals have been supported by further safe haven buying and investor interest while agricultural markets, which didn’t suffer as badly as the rest of the complex, are modestly firmer.”
Many commodities had plunged the previous week as traders worried about the eurozone debt crisis, a strong dollar, the strength of Chinese demand and falling global share prices.
Oil: Oil prices rallied back above $75 this week, boosted by signs of higher demand for energy, traders said, and after dropping close to 10-month lows one week earlier.
“Oil prices continue to rise as the focus on fundamentals returns, with OECD oil demand and in particular US oil demand improving markedly,” said Barclays Capital analyst Amrita Sen.
Oil prices began spiking on Wednesday, with sentiment lifted by recovering stock markets and fresh data pointing to a sustained economic recovery in the key US energy market.
A report by the US Department of Energy showed an unexpected dip in US gasoline (petrol) supplies of 200,000 barrels. Distillate stocks, including diesel and heating oil, fell 300,000 barrels in the week ending May 21.
Andrey Kryuchenkov, a commodities analyst with Russian investment bank VTB Capital, said the market was “upbeat about healthy demand for fuel products in the US.”
Oil built on Wednesday’s gains by surging more than two dollars on Thursday as the euro rebounded against the dollar and global stock markets bounced higher, traders said.
A weaker US unit makes dollar-priced crude cheaper for buyers using stronger currencies, which therefore tends to stimulate oil demand and push prices higher.
Crude oil prices sunk more than one dollar on Tuesday on fears the eurozone financial crisis could turn toxic for the global economic recovery.
Fears that contagion from Greece’s sovereign debt crisis could spread to other vulnerable eurozone members were heightened by the Spanish government’s bailout of a regional savings bank, Cajasur, over the weekend.
On London’s Intercontinental Exchange, Brent North Sea crude for July delivery soared to $74.63 compared with $71.72.
Precious metals: Prices recovered after sharp losses a week earlier.
The glamorous metal had hit an all-time pinnacle of $1,249.40 an ounce in early May, dragging sister metal silver to a two-year peak.
Silver rose to $18.53 an ounce from $17.72.
On the London Platinum and Palladium Market, platinum climbed to $1,555 an ounce from $1,492.
Palladium increased to $471 an ounce from $419.
Base metals: Base metals prices rose across the board.
By Friday on the London Metal Exchange, copper prices for delivery in three months rose to $6,991 a tonne from $6,731 a week earlier.
Three-month aluminium climbed to $2,075 a tonne from $2,036.
Three-month lead gained to $1,868 a tonne from $1,766.
Three-month tin grew to $18,200 a tonne from $17,400.
Three-month zinc advanced to $1,942 a tonne from $1,878.
Three-month nickel increased to $21,630 a tonne from $21,255.
Cocoa: Cocoa futures struck the highest level for 32 years in London, at £2,451 a tonne.
By Friday on LIFFE — London’s futures exchange — the price of cocoa for delivery in July jumped to £2,437 a tonne from £2,317 the previous week.
On the NYBOT, the July cocoa contract grew to $2,985 a tonne from $2,896.
Grains and soya: Maize and soyabean prices edged ahead, while wheat fell.
By Friday on the Chicago Board of Trade, maize for delivery in July firmed to $3.695 a bushel from $3.69 the previous week.
July-dated soyabean meal — used in animal feed — climbed to $9.50 from $9.41.
Wheat for July dropped to $4.6 a bushel from $4.72.
Coffee: Coffee prices steadied.
On the NYBOT, Arabica for July gained to 135 US cents a pound from 132 cents.
Sugar: Sugar prices retreated.
On LIFFE, the price of a tonne of white sugar for August slid to £475.80 from £497.60.
Rubber: Malaysian rubber prices gained in thin trade.
The Malaysian Rubber Board’s benchmark SMR20 rose to 287.80 US cents a kilo on Thursday from 270.30 cents the previous Friday.
