LONDON: World oil prices dived to multi-month lows this week, weighed down by abundant stockpiles in top consumer the United States, dealers said.
Coffee futures slumped to their lowest levels in four-and-a-half years, as traders also eyed the prospect of bumper harvests from top producers Brazil and Vietnam.
On the upside, precious metals won some support as the dollar hit a two-year euro low, with poor non-farm payrolls (NFP) data raising expectations the Federal Reserve would keep its stimulus programme in place.
OIL: The crude oil market hit a series of low points as rising US reserves stoked demand worries. New York crude plunged on Thursday, striking a low of $95.95 per barrel — which was last witnessed on June 28.
And London Brent oil sank on Friday to $106.52 a barrel, touching a level last seen on August 9.
The US government’s Department of Energy (DoE) said on Monday that US crude reserves had soared by 5.2 million barrels in the week ending October 18, easily beating expectations.
Another DoE report on Monday, delayed by the US government shutdown, showed crude inventories had jumped 4 million barrels in the previous week to October 11.
Prices were also dented by the weaker-than-expected NFP report, traders said. The pivotal data, delayed by the shutdown, showed that the American economy added 148,000 jobs last month.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in December slid to $106.62 per barrel from $109.60. On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for December slid to $97.54 a barrel from $101.02 for the November contract a week earlier.
PRECIOUS METALS: Gold jumped to a one-month peak at $1,352.05 per ounce on Thursday, dragging sister metal silver to a five-week pinnacle at $22.88 per ounce. “Gold and silver climbed noticeably ... after the delayed September labour market report in the US fell short of expectations, making it less likely that the US Federal Reserve will scale back its bond purchases in the near future,” said Commerzbank analysts.
“The Fed’s March meeting is now regarded as the most likely time that this will be decided. As a result, the US dollar also dropped noticeably — falling against the euro to its lowest level in nearly two years — which lent additional support to prices.”
The European single currency hit a new two-year high at $1.3823 on Friday. The flagging greenback makes dollar-denominated raw materials cheaper for buyers using stronger currencies, which can stimulate demand and push prices higher.
By late Friday on the London Bullion Market, the price of gold rallied to $1,347.75 an ounce from $1,316.50 a week earlier. Silver advanced to $22.35 an ounce from $21.87. On the London Platinum and Palladium Market, platinum gained to $1,440 an ounce from $1,438. Palladium eased to $733 an ounce from $737.
BASE METALS: Most base or industrial metals sank as tensions in China’s interbank market eclipsed news of upbeat manufacturing data in the Asian powerhouse. Data published by HSBC showed the bank’s preliminary Chinese purchasing managers’ index for this month was 50.9, an improvement from September’s 50.2 and the highest level since March.
The index tracks manufacturing activity in China’s factories and is a closely watched gauge of the health of the economy. A reading above 50 indicates growth, while anything below signals contraction.
Earlier in the week, aluminium, lead, nickel and zinc had set multi-month highs on the back of the weak dollar.
By Friday on the London Metal Exchange, copper for delivery in three months fell to $7,134 a tonne from $7,273 a week earlier. Three-month aluminium eased to $1,854.50 a tonne from $1,855. Three-month lead decreased to $2,170 a tonne from $2,185. Three-month tin reversed to $22,820 a tonne from $23,000. Three-month nickel climbed to $14,501 a tonne from $14,195. Three-month zinc sank to $1,929.75 a tonne from $1,945.50.
COFFEE: Prices nose-dived to their lowest levels in four-and-a-half years, as traders eyed the prospect of bumper harvests from top producers Brazil and Vietnam.
Arabica slumped on Thursday to 109.50 US cents per pound, the lowest level since March 2009, while Robusta hit $1,562, which was last touched in June 2010. “Favourable weather conditions mean that next year once again expects to see a very good crop in Brazil,” said Commerzbank analysts.
By Friday on the ICE Futures US exchange in New York, Arabica for delivery in December had dipped to 110.60 US cents a pound from 114.60 cents a week earlier. On LIFFE, London’s futures exchange, Robusta for January sank to $1,582 a tonne from $1,638 a week earlier.
SUGAR: Prices dipped as traders’ attention returned to abundant supplies, after striking a one-year peak the previous week following a fire at a key terminal in top producer Brazil.
“Prices have completely given back the gains seen from the fire in Brazil last Friday. The overall fundamental of big supplies remains,” said US-based Price Futures Group analyst Jack Scoville. Last week, New York sugar soared to $20.16 US cents a pound — the highest level since October 22, 2012.
Scoville added: “Sugar prices had dropped until recently due to big world production and especially big production in Brazil.”
By Friday on the ICE Futures US exchange, the price of unrefined sugar for delivery in March 2014 eased to 18.89 US cents a pound from 18.97 cents a week earlier. On LIFFE, the price of a tonne of white sugar for December slid to $501.50 from $507.
COCOA: Prices fell on profit-taking after striking two-year pinnacles the previous week on the back of strong demand. By Friday on LIFFE, cocoa for delivery in December 2014 dropped to £1,701 a tonne from £1,763 a week earlier. On ICE Futures US, cocoa for December slid to $2,686 a tonne from $2,759 a week earlier.
RUBBER: The market fell on weak demand, in line with lower rubber prices on the Tokyo Commodity Exchange. The Malaysian Rubber Board’s benchmark SMR20 slid to 234.95 US cents a kilo from 236.50 cents the previous week AFP