Oil prices strengthen on supply increase
Oil prices strengthen on supply increase
LONDON (AFP): Crude prices bounced back after the kingpin OPEC producers gathered in Vienna agreed to a modest increase in supply and dismissed the price-setting formula that had been drafted earlier this year.
Crude oil prices surged above 30 dollars in London and rose above US$32 in New York as the market reacted to the dismissal by OPEC of a price-setting mechanism and to a promise of a modest production increase.
In London, the price of benchmark Brent crude for August delivery rose to 30.41 dollars a barrel (for August delivery) from 28.73 dollars.
In New York, light sweet crude for August delivery rose to 32.19 dollars a barrel from 31.82 dollars a barrel. Prices touched 32 dollars in London and 33 dollars in New York midweek.
The price rise was a reflection of market belief that the pledge by OPEC to increase production by 708,000 barrels per day from July 1 was insufficient to soothe overheating world oil markets.
Dealers were also dismayed by OPEC's decision not to abide by a recently-set mechanism designed to moderate prices.
Gold: tarnished. Gold prices fell back in thin trading volumes under the weight of a strengthened dollar after the currency losses of the previous week were reversed.
The spot price on the London Bullion Market weakened to $285.30 from $290.30 an ounce.
While a stronger dollar came to afflict international demand for the dollar-denominated contracts, the losses were contained by the rise in oil prices, as the traditional link with "black gold" showed its face once more.
Silver: slipper. Silver prices fell to their lowest level for 1-1/2 years mid-week, swept lower by gold, before recovering a little of the lost ground before the week's end.
Cash prices on the London Bullion Market fell to $4.93 from $5.06 an ounce.
Platinum and palladium: shine. Platinum prices soared to 11- year highs as Russian exports continued to remain few and far between on the international markets.
Platinum rose to $572 an ounce from $542.
In contrast, palladium prices fell back slightly on the London market. Cash prices slipped to $660 an ounce from $669.
Base metals: heavy. The price of most base metals fell back slightly in the wake of nickel, which dipped to an eight-month low as the draw-down of market reserves began to slow and on reduced demand from Asia and the United States.
Three-month nickel prices on the London Metal Exchange fell to $7,740 a ton from $8,240.
Three-month copper remained unchanged at $1,788 a ton.
Aluminum fell to $1,562 a ton from $1,569 a ton.
Zinc slipped to $1,141 a ton from $1,142.5.
Lead fell to $433 from $439 a ton.
Tin rose to $5,540 a ton from $5,455.
Rubber: bounce. Rubber prices rose slightly amid thin trading volumes.
In Kuala Lumpur, the RSS1 index rose to 2.68 ringgit per kilo from 2.66 ringgit. The SMR20 index held at 2.30 ringgit.
The London rubber index rose by 10 pounds to 517.5 pounds per ton.
Cocoa: hot. Cocoa prices rose back from recent losses as dealers feared for the political stability of Cote d'Ivoire, the world's leading producer, and in Indonesia, another important producer country that has been racked by internecine violence.
In London, September contracts rose to 659 pounds a ton from 656 pounds.
Dealers were keenly awaiting news of the forthcoming harvest in west Africa.
Coffee: blend. Coffee prices remained under pressure, close to eight-year lows, inspite of frost in some regions of Brazil. In London, Robusta prices rose by four dollars to $907 a ton.
In contrast in New York, Arabica (for September delivery) fell to 89.50 cents a pound from 91.35 cents.
Although some frosts were reported in southern Brazil, market- watchers said that there had been little damage caused to plantations there.