Oil warms to prolonged cutback pledge

Oil warms to prolonged cutback pledge

LONDON (AFP): Crude prices jumped back above US$21 a barrel to
the highest level since October 1997 after Saudi Arabia, Mexico
and Venezuela pledged to maintain production cutbacks until March
2000.

Brent North Sea crude on the International Petroleum Exchange
(IPE) rose to $21.04 a barrel for October delivery.

And in New York, light sweet crude prices bounced back to
$21.49.

The pledges underpinned renewed faith in the oil market, in a
continuation of gains seen since April, when OPEC producer
countries agreed to reduce production by 1.7 million barrels per
day.

Other important producer countries also agreed to reduce
production, taking total cutback pledges to 2.1 million barrels a
day.

The cuts were designed to lift crude out of the morass that
had seen oil prices down at the 10-dollar mark.

Analysts said that the latest pronouncement was likely to
presage a similar statement of intent from the full Organization
of Petroleum Exporting Countries when it meets on September 22.

Gold: rebound. Gold gained from a weaker dollar against the
yen, which makes the dollar-denominated contracts more attractive
to Asian investors, and from stronger platinum group prices.

The gold spot price on the London Bullion Market rose by $1.5
to $255.5 an ounce.

The dollar fell to its lowest level since January against the
yen, in part due to renewed international confidence in the
Japanese economy and in part because of a string of losses on
Wall Street.

But gold's resurgence was limited ahead of the next Bank of
England bullion auction on September 21.

Prices hit a 20-year low point after the central bank's first
gold sale in July. Britain plans to sell off half its gold
reserves to hold currency assets instead of metal.

Silver: gilded. Silver prices once again followed gold higher
and gained further from technical purchases.

On the London Bullion Market, an ounce of silver rose by seven
cents to $5.14 an ounce.

Platinum and palladium: shine. These two sister metals gained
from the rise of the yen against the dollar and from figures
showing strong car sales around the world.

On the London Palladium and Platinum Market, palladium prices
rose by five dollars to $345 an ounce and platinum prices gained
one dollar to $349.5 an ounce.

The rally of the yen to seven-month highs against the dollar
aided demand for palladium in Japan, which is the world's most
hungry consumer of the metal.

Palladium is most widely used in the manufacture of catalytic
converters for cars.

Base metals: strong. Base metals advanced strongly last week
on the London Metal Exchange thanks to robust demand, technical
trades and supply side factors.

Aluminum prices also pushed higher while zinc hit its highest
point since November 1997 albeit amid a limited trading volume.

Three-month copper prices gained $96 to $1,760 per ton as
official LME stocks contracted by 3,025 tons to 786,350 tons.

Nickel prices gained $462.5 a ton to $7.045, though reserves
swelled by 366 tons to 50,502 tons.

Three-month aluminum rose by $28.7 to $1,506 per ton. Stocks
rose by 2,125 tons to 7+8 375 tons.

Zinc put on 35.2 dollars to 1,197 dollars per ton, despite LME
stocks rising by 1,800 tons to 283,150 tons.

Lead prices rose by $5.75 to $533 per ton.

Three-month tin prices rose by 67.5 dollars to $5,275 per ton.

Rubber: bouncy. Rubber prices firmed further last week as
interest in the market picked up, while no further news emerged
on the decision of Thailand and Malaysia to quit the
International Natural Rubber Organization (INRO), which
intervenes in the market through a buffer stock.

The London rubber index ended the week at 417.50 pounds per
ton for October delivery from 410 pounds, and at 422.50 pounds
per ton for November, from 415.

In Kuala Lumpur, the RSS1 index stood at 2.16 ringgits from
2.14, while the SMR 20 indices for rubber used in tire
manufacture stood at 2.20 ringgits from 2.13.

Cocoa: warm. Cocoa prices gained from a general improvement on
the commodity markets last week, in spite of plentiful supply
from west Africa.

Prices on the London market rose by six pounds to 654 pounds
per ton.

Supply from west Africa was rife.

Cote d'Ivoire, which is the world's leading producer country,
has reaped more than 1.2 million tons of cocoa in the 1998-1999
season, compared with 1.008 million during the previous year, to
give a 19-percent increase.

Coffee: blend. The international coffee markets were divided
last week, with modest losses in London and a slight upturn in
New York, prompted by a surge of exports on the one hand and
fears of drought in Brazil on the other.

Robusta for November delivery on the London market lost eight
dollars to $1,342 a ton.

Meanwhile in New York, Arabica for December delivery rose to
94.10 cents a pound from 91.75 cents.

London prices were hit by International Coffee Organization
figures showing a rise of eight percent in global coffee exports
between October and July to 71,038,902 sacks.

Sugar: spice. Sugar prices picked up last week as the
traditional slow summer season drew to a close and market players
factored in a likely strong demand from Russia later in the
winter.

On the London market, contracts for December delivery put on
more than seven dollars to $188.8 a ton from $181.50.

Vegetable oils: slick. US soya prices recouped losses last
week as dealers anticipated lower output estimates from the US
Agriculture Department due out next Friday.

On the Chicago Board of Trade (CBoT), soya prices put on 28
cents a bushel to 4.89 cents for September delivery.

Cotton: light. Cotton prices lost further ground in light
trading volume last week.

Hurricane Dennis had no impact on U.S. growing regions.
Dealers predicted that a new market system in China might lead to
lower prices there and thus increase demand from overseas
investors.

New York prices contracted by 1.3 cents to 49.50 cents a
pound.

Cash prices covered by the Cotton Outlook index also lost 1.3
cents to 48.80 cents.

Wool: cold. Australian wool prices continued to fall amid low
demand.

The Eastern index lost 13 cents to A$5.48 a kilo.

There were no auctions in Britain. The Wooltops index lost 22
pence to 2842 pence per kilo.

Tea: brewing. Demand picked up in the Mombasa auction houses
as higher grade leaves came to market.

Top quality BP1 (Broken Pekoe) leaves gained up to 12 cents
per kilo.

PF1 (Pekoe Fannings) tea rose by up to 20 cents.