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Iraq unrest, weak dollar lift raw material prices

Oil

Brent hit nine-month peaks as dealers tracked the unfolding sectarian conflict in crude-exporting Iraq. “Predominant gains [last] week have derived from the ongoing siege of Iraq’s largest oil refinery, Baiji,” said Dorian Lucas, an analyst at energy consultancy Inenco. “Thus far the gains in Brent crude are based around sentiment that oil supplies from the Opec’s second-largest producer may be disrupted. On Thursday, Brent reached $115.71 a barrel — the highest point since September. Brent is a benchmark for the pricing of Middle East crude. By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in August stood at $114.66 a barrel compared with $113.29 for the July contract one week earlier. On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for July gained to $107.13 a barrel compared with $106.64 a week earlier.

Precious metals

Haven investment gold rallied on investor concern over Iraq, which pulled sister metal silver up to a three-month high of $20.98 an ounce on Friday. Gold reached a two-month peak of $1,322.41 an ounce on Thursday. By Friday on the London Bullion Market, the price of gold jumped to $1,312.50 an ounce from $1,273 a week earlier. Silver increased to $20.62 an ounce from $19.58. On the London Platinum and Palladium Market, platinum climbed to $1,456 an ounce from $1,437. Palladium advanced to $829 an ounce from $816.

Base metals

Prices rose across the board, with zinc reaching a 16-month high at $2,179 a tonne on Friday. By Friday on the London Metal Exchange, copper for delivery in three months climbed to $6,779.75 a tonne from $6,649.75 a week earlier. Three-month aluminium increased to $1,894 tonne from $1,841.50. Three-month lead grew to $2,146 a tonne from $2,080. Three-month tin gained to $22,650 a tonne from $22,600. Three-month nickel advanced to $18,523 a tonne from $18,087. Three-month zinc jumped to $2,172.25 a tonne from $2,083.

Cocoa

Futures hit near three-year highs at $3,128 a tonne on Thursday but gains could be capped ahead. “Demand is good but the current run of very good weather in Central West Africa is keeping any sharp upside contained for the time being,” noted Citi bank analyst Sterling Smith. By Friday on Liffe, London’s futures exchange, cocoa for delivery in September rose to £1,928 a tonne from £1,924 a week earlier.

Coffee

Prices retreated, with Arabica reaching four-month lows at 166.55¢ a pound on Thursday. On ICE Futures US, Arabica for delivery in September fell to 170.50¢ a pound from 178¢ a week earlier. On Liffe, Robusta for September slipped to $1,978 a tonne from $1,988 for the July contract a week earlier.

Sugar

Futures rose sharply on the prospect of tighter Brazilian and Indian supplies, traders said. By Friday on LIFFE, the price of a tonne of white sugar for delivery in August jumped to $488.50 from $457.70 a week earlier. On ICE Futures US, the price of unrefined sugar for October rallied to 18.63¢ a pound from 17.60¢ a week earlier.

Rubber

Prices in Kuala Lumpur extended gains as the ringgit weakened against the US dollar, boosting demand for the commodity. The Malaysian Rubber Board’s benchmark SMR20 rose to 173.60¢ a kilo from 168.55¢ a week earlier.