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.