Oil prices soar amid uncertainty over output
Oil prices soar amid uncertainty over output
LONDON (AFP): Oil prices soared to fresh nine-year high points
as uncertainty continued to swirl through the market over future
production levels.
Leading producers gathered in London and agreed that output
would rise in the coming year, but the key questions of by how
much and when still remained unanswered.
Oil prices climbed to nine-year highs following a meeting of
the Saudi Arabian, Venezuelan and Mexican oil ministers which
established the need for increased supplies, but failed to
produce agreement on how and when.
On the London market, the price of benchmark Brent North Sea
crude for April delivery on Friday was trading at US$29.13 a
barrel compared with $27.25 a week earlier.
In New York on Thursday the price of light sweet crude for
April delivery closed at $31.69, after rising to slightly more
than $32 earlier in the day. Last Thursday it was trading at
$29.97 a barrel.
Analysts said that in view of the continued uncertainty, they
believe prices will remain high in the short term, although, in
the longer term, they are considered unsustainable.
The market had high hopes for Thursday's London meeting of
Saudi Arabian Oil Minister Ali al-Nuaimi and his Venezuelan and
Mexican counterparts Ali Rodriguez and Luis Tellez.
The Saudi and Venezuelan ministers and a Mexican official were
last year instrumental in drawing up the reduced oil supply
regime which expires on March 31.
Gold: sliding. Gold prices weakened under the weight of
decline in the price of platinum, the strength of the U.S. dollar
and the prospect of further gold sales by central banks.
The spot price on the London Bullion Market fell to 289.30
dollars from 397.15 dollars an ounce the week before.
The precious metal has now lost the gains it made following a
surge last month brought about after the second-biggest Canadian
producer Placer Dome said it would suspend hedging activities for
an unspecified period of time.
Hedging, which involves selling forward gold not produced yet,
has long been used to protect the price of gold. However,
detractors argue that, although it might prevent the worst falls,
it pushes the price lower than might would otherwise have been.
Prices were pulled lower last week after the Dutch central
bank said it has sold almost all the 100 tons of gold it planned
to sell this year, and the Bank of England confirmed plans to
auction 150 tonnes of gold over the financial year 2000-2001, as
part of its ongoing restructuring of Britain's reserve holdings.
Silver: weakening. The general weakening of precious metals
dragged silver lower.
Cash prices on the London market fell to $5.03 an ounce from
$5.25.
Platinum and palladium: falling. Palladium and platinum prices
continued to fall after Interfax news agency reported that Acting
President Vladimir Putin signed a decree allotting new export
quotas for platinum and palladium for 2000.
Palladium ended the week at $670 compared with $700 at the end
of previous week. Earlier this month, palladium climbed to record
highs of more than $800 an ounce.
Platinum followed palladium downwards to $463 compared with
$475 the week before.
Base metals: mixed. Nickel and aluminum prices fell back,
drawn lower by falls in copper whose price was lowered by an
increase in supply.
On the London Metal Exchange (LME) three-month nickel prices
lost $55 to $10,005 per ton. LME stocks fell to 34,926 tons from
36,048 tons.
Copper prices fell by $84 to $1,760 per ton after a rise in
LME reserves to 831,750 tons from 814,800 tons.
Aluminum fell by $52 to $1,607 per ton.
Three-month zinc fell by $13 to $1,131 per ton.
Lead lost $3.5 to $463.5 per ton.
Tin fell by $60 to $5,680 per ton.
Rubber: deflated. Rubber prices fell back sharply last week as
supply increased and demand stagnated. The International Natural
Rubber Organization -- which announced its demise at the end of
1999 -- refused bidders for its stocks on the ground the prices
being offered were too low.
The London rubber index sank to 500 pounds a ton, compared
with 527 pounds previous week, while in Kuala Lumpur, the RSS1
index was at 2.78 ringgit per kilo, compared with 2.93 ringgits
previous week.
Cocoa: hot. Cocoa prices continued to rise on speculative and
technical purchases in spite of predictions of a record harvest
in the world's leading producer country, Cote d'Ivoire.
May contracts on the London market rose by 40 pounds to 620
pounds a ton.
Dealers forecast a crop of up to 1.3 million tons in Cote
d'Ivoire.
Coffee: warming. Coffee prices picked up from the seven-year
lows seen previous week on predictions of a smaller-than-expected
crop in some regions of Brazil and Colombia.
Robusta contracts in London rose to $1,014 per ton for May
delivery from $993.
In New York, Arabica (for May) rose to 105.85 cents a pound
from 103.15 cents.
Sugar: melt. Sugar prices fell under the weight of hefty stock
levels.
In London, August contracts fell to $171.7 a ton from $172.4.
In New York, white sugar for May delivery fell to 4.96 cents a
pound from 5.12 cents.
Cotton: strong. U.S. cotton prices continued to rise.
May contracts in New York rose to 60.68 cents a pound from 60.33
cents.
Cash prices covered by the Cotton Outlook index rose to 56.10
cents a pound from 54.70 cents.
Wool: threadbare. Wool prices took another hit from the
weakness of the Australian dollar.
The Eastern index lost one cent to 638 Australian cents per
kilo. The Wooltops index held at 283 pence a kilo.