Tropical storm boosts increase in oil prices
Tropical storm boosts increase in oil prices
LONDON (AFP): The tropical storm over the Gulf of Mexico gave a badly needed boost to flagging oil prices last week in London, amid growing calls from OPEC for producers to stick to production cuts and force up prices.
Brent, the reference North Sea crude, gained almost 10 cents a barrel on the International Petroleum Exchange.
The storm is threatening off-shore operations and production, as well as the loading and unloading of tankers, prompting refineries to hoard reserves.
In addition, Saudi Arabia, Kuwait and Qatar called on other Organization of Petroleum Exporting Countries to respect quota cuts aimed at slashing production by 1.365 million barrels a day.
Elsewhere on the commodities markets, base metals continued to lose ground, mostly due to hefty increases in warehouse stocks of the London Metal Exchange.
Gold: unwanted. Gold prices dipped towards the end of the week as investors moved away from the financial safehaven as the initial storm around the release of the report into President Bill Clinton's sex and lies scandal eased.
Gold closed on the London Bullion Market at about US$290.55 an ounce, down $4.5.
Prices also slid in response to the recovery of the dollar against the yen at the end of the week.
However, gold found some support as a refuge against inflation after the U.S. Federal Reserve governor said he was concerned by price rises in the United States, analysts said.
Silver: dip. Silver dipped by four cents to $4.94 an ounce on the London Bullion Market in the wake of gold.
Palladium and platinum: flat. The two precious metals were flat this week, following the delivery last week of the first palladium supplies for 1998 to Japan.
The first deliveries of platinum and sister metal rhodium were to arrive in Japan in the coming days, Japanese traders said.
Japan is the world's biggest importer of platinum group metals, while Russia is the biggest palladium producer and second biggest platinum producer, behind South Africa.
Palladium was unchanged at $288 an ounce, platinum lost five dollars to $358 an ounce.
Copper: piled up. Copper prices on the London Metal Exchange fell slightly this week, mainly due to a huge increase in LME warehouse reserves of 16,875 tons to 362,725 tons.
Three-month copper fell $43 to $1,646.50 a ton.
Japan's Nippon Mining announced plans for a 30,000 tons increase in capacity at its Saganoseki site, which produces 335,000 tons of copper annually.
Nickel: dull. Three-month nickel prices weakened substantially, losing $70 to $4,077.50 a ton, while LME warehouse stocks rose 510 tons to 59,022 tons.
Russia's Norilsk Nickel, the biggest producer in the world, said its exports have not been affected by the country's political and economic turmoil, something that would have driven prices up.
Tin: flat. Three-month tin fell $42.50 to $5,377.50 a ton, while LME reserves rose 465 tons to 8,370 tons, amid quiet trading.
Oil: hot. Brent, the reference North Sea crude, rose to about $13.73 a barrel for October, up from $13.62 a week before, as storms in the Gulf of Mexico threatened delivery disruptions.
Traders said the tropical storm was due to worsen, threatening both off-shore production in the gulf and tanker traffic.
This has prevented investors from selling before the weekend, while refiners are building up reserves in case the weather does not improve.
In another boost for the flagging oil price, Kuwait, Qatar and Saudi Arabia appealed to OPEC and non-OPEC producers to stick to their agreements on reducing production quotas.
In the medium term, the price of oil could average $12 to $16 a barrel from $18 over the past 10 years, the company said.
Rubber: flat. Rubber prices were stable this week, with September rubber on the London rubber index at 470 pounds a ton, and October rubber at 475 pounds a ton.
The RSS1 index in Kuala Lumpur rose slightly to 2.59 ringgits a kilo from 2.57 ringgits.
Cocoa: cold. December cocoa prices on the LIFFE futures market fell to 1, 013 pounds a ton from 1,071 pounds, amid continued worry over the economic crisis in Russia, a major chocolate consumer, and Brazil's financial turbulence.
Prices were also pressured by major selling from Ghana, the world's second biggest producer.
Coffee: dark. Robusta coffee for November delivery fell sharply to $1,598 a ton from $1,679 the previous week.
Supply was expected to remain finely balanced until December, when Vietman's 1998-99 harvest will hit the markets, traders said.
Indonesia is expecting a good 1999-2000 harvest, starting in April 1999. After having suffered major droughts this season, production should increase by about 15 percent to 6.7 million sacks next year.
On the New York futures market, December Arabica coffee rose to 101.85 cents a pound from 109 cents.
Sugar: powder. White sugar prices rose this week on the back of a 70,000 ton tender from Europe, as well as bargain hunting after last week's low prices.
Prices also rose in response to a decline in expectations of a Brazilian interest rates cut, which would have triggered massive selling by Brazilian producers to compensate.
Sugar on the LIFFE futures market for 1999 delivery closed at $223.2 a ton, from $217.50.
Grains: stale. The U.S. grains market picked up on technical factors at the end of the week.
However, it was depressed by weakness on the international financial markets and the lack of support from US Federal Reserve Chairman Alan Greenspan for a coordinated cut in interest rates in G7 countries.
European Union reform to wheat subsidies, threatening a blow to US wheat sales in Europe, also hit sentiment.
On the Chicago Board of Trade, September wheat rose five cents to $2.53 for 27.2 kilos. September maize rose five cents to $1.95 a bushel of 25.4 kilos.