LONDON, 1 August 2004 — Oil prices surged to record high points this week, fueled by fears about tight supplies amid a worsening threat of disruption to Russian exports caused by the financial crisis at Yukos.
Gold prices fell to around six-week low levels, hit by a stronger dollar.
The Commodities Research Bureau’s index of 17 commodities fell to 267.58 points on Friday from 269.28 a week earlier.
Gold: Gold prices fell to their lowest level since mid-June early in the week, dragged down by a resurgent dollar, which rose to two-month high points against the yen and six-week highs against the euro.
Gold prices won back some ground later in the week.
A stronger dollar makes gold, which is priced in the US currency on world markets, less attractive to many buyers outside the United States.
The price of gold dropped on Tuesday to a morning fixing of $386.20 per ounce on the London Bullion Market.
It came after the dollar rose to the highest level for more than one month against the euro following a report showing US consumer confidence at a two-year high, increasing the likelihood of quicker moves to hike US interest rates.
“Gold has weakened because once again, there are increased expectations of US interest rates rising for the rest of the year, and that’s bad for gold,” said analyst Matthew Turner at consultancy group Virtual Metals.
“The fear is that gold’s investment potential is worse when there are high interest rates and that funds may move into higher-earning assets,” he added.
By Friday, gold prices stood at a fixing of $391.40 per ounce on the London Bullion Market against $391.50 a week earlier.
Silver: Silver prices shrugged off gold’s poor showing to climb modestly in the wake of strong performances from base metals. “Rallying base metals may lead silver to move higher, looking beyond the short-term volatility,” UBS analyst John Reade said. Although considered a precious metal, silver is used mainly in industrial production, notably for photographic material and dentistry.
Silver prices climbed to $6.42 per ounce on Friday from $6.35 a week earlier.
Platinum and Palladium: Platinum prices held steady, supported by news of production delays by South African group Anglo Platinum, while palladium prices edged lower.
“The platinum price remains supported by the announcement by Anglo Platinum this week that the expansion projects were being delayed, because of the strong rand,” Virtual Metals analyst Turner said. “It means that the supply of platinum will be less, so that’s giving strong support to prices. Palladium is still not doing much,” he added.
By Friday, platinum prices stood at $818 per ounce on the London Platinum and Palladium Market, unchanged from a week earlier. Palladium prices traded at $216 per ounce against $220 the previous week.
Base Metals: Base metals prices received a boost as a result of labor disputes at various production sites, although the stronger dollar prevented any real surge.
“There is still a lot of attention focused on the labor disputes and the strikes in copper and aluminum,” said analyst Andrew Cole of the Metal Bulletin Research journal.
“The aluminum strike in still ongoing at Becancourt in Canada and I understand there are talks about Alcoa workers striking in sympathy with the people in Becancourt.
“For copper, the concerns have eased a little bit although the labor disputes (notably in Mexico) haven’t all reached a resolution,” he added. By Friday, three-month copper prices stood at $2,810 per ton on the London Metal Exchange from $2,710 a week earlier.
Three-month aluminum prices traded at $1,690.50 per ton against $1,663.
Three-month nickel prices eased to $13,705 per ton from 13,800.
Three-month lead prices climbed to $895 per ton from $852. Three-month tin prices lifted to $8,900 per ton from $8,540. Three-month zinc prices rose to $1,033.50 per ton from $978.
Oil: Oil prices rocketed to record high points yesterday as traders worried over the risk of disruption to exports from Russia amid the financial crisis engulfing oil giant Yukos, as producers struggled to keep up with demand.
New York’s reference contract, light sweet crude for delivery in September, reached a new all-time peak of $43.60 per barrel in early deals.
London’s Brent North Sea crude oil for September delivery rose to $39.90 per barrel in late trading, the highest level since October 1990, when it peaked at $40.95 after Iraq’s invasion of Kuwait ahead of the 1991 Gulf war. The New York price broke the previous record of $43.05 set on Wednesday when Yukos, Russia’s largest oil producer, warned it could halt output within days because court bailiffs had ordered its subsidiaries to cease all operations that would affect the state of their assets.
Markets cooled Thursday after official orders signed by a Russian Justice Ministry bailiff said that three of the group’s key subsidiaries could continue sales and production. But the reprieve was short-lived with prices shooting up again on Friday.
By Friday, the price of benchmark Brent North Sea crude oil for September delivery stood at $39.68 per barrel in late London trading against $38.05 a week earlier.
In New York, the reference light sweet crude September contract rose to $43.35 per barrel from 41.45 dollars a week earlier.
Rubber: Rubber prices found a firmer footing after recent losses. “The market was steadier, especially in Japan. Physical offtake is quiet, nothing to get excited about,” said one London trader. In Osaka, the RSS 3 October contract stood at 140 cents on Friday against 134.70 cents a week earlier.
Singapore’s RSS 3 October contract gained to 122 US cents from 120 cents the previous Friday.