Brent tops US$61 as outlook brightens

London

BRENT oil prices soared above US$61 last week for the first time this year, aided by upbeat news on Ukraine and Greece and by rebounding economic growth in eurozone powerhouse Germany.

Elsewhere in commodity markets, India overtook China as the world's top consumer of gold, according to newly published industry data.

Crude oil prices rallied above US$61 a barrel on easing tensions surrounding Greece and Ukraine, and as the global economic outlook brightened.

Sentiment was given another boost as official data showed the German economy expanded surprisingly strongly in the fourth quarter of 2014, driven by robust consumer spending.

Crude futures had risen sharply on Thursday, gaining almost US$2.50 on reports that leading petroleum producers are curtailing investment.

In a topsy-turvy week for the oil market, prices fell sharply on Wednesday with New York crude sliding below US$49, as swelling US inventories added to the global supply glut.

The US stockpiles report showed crude reserves standing at an 80-year high for this time of the year.

Oil prices have been under pressure for months, plunging about 60 per cent to just over US$40 between June and late January. However, they have recovered slightly in recent weeks as the number of drilling rigs has fallen and oil companies such as Total and Royal Dutch Shell trimmed some investment.

Crude futures also shot higher as data revealed production cuts that could curb the global supply glut.

By Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in April leapt to US$61.19 a barrel from US$58.08 for the March contract one week earlier.

On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for March rallied to US$52.70 a barrel compared with US$50.48.

Gold prices fell as many investors shunned the safe haven asset amid easing global tensions, while India overtook China as the top world consumer of the metal.

China lost its place to India as the world's biggest gold consumer in 2014, sector data showed on Thursday, hit by collapsing jewellery demand after one year in the top spot.

Indian gold demand sank 14 per cent to 842.7 tonnes last year from 2013, but Chinese demand slumped 38 per cent to 814 tonnes, the World Gold Council (WGC) said in a report.

Overall gold demand meanwhile dropped 4 per cent last year to 3,924 tonnes compared with a record amount in 2013, pushed lower as Chinese jewellery demand tumbled by a third. That marked the lowest overall level in five years and was also the third successive annual decline for the metal, whose two main drivers are jewellery and investment buying.

By Friday on the London Bullion Market, the price of gold dropped to US$1,232.50 an ounce from US$1,241 a week earlier.

Silver slid to US$16.86 an ounce from US$17.22.

On the London Platinum and Palladium Market, platinum decreased to US$1,201 an ounce from US$1,239.

Palladium was unchanged at US$786 an ounce.

Base or industrial metal prices also won a boost from easing worries over Greece and Ukraine, and bright economic growth in Germany and the eurozone. Investors still need reassuring over China's economic slowdown and stubborn concerns over the potential exit of Greece from the eurozone, dealers said.

By Friday on the London Metal Exchange, copper for delivery in three months rose to US$5,717.50 a tonne from US$5,677.50 a week earlier.

Three-month aluminium dipped to US$1,847 a tonne from US$1,878.50.

Three-month lead increased to US$1,840 a tonne from US$1,795.80.

Three-month tin declined to US$17,445 a tonne from US$18,225.

Three-month nickel gained to US$14,710 a tonne from US$14,480.

Three-month zinc advanced to US$2,105.50 a tonne from US$2,080.

Cocoa futures gained ground on weather-linked supply concerns in key producing nations in West Africa.

"The prospect of a weaker West African mid-crop as compared with last year is causing cocoa prices to rise," said Commerzbank analysts.

By Friday on LIFFE, London's futures exchange, cocoa for delivery in July rose to £1,970 a tonne compared with £1,911 for the May contract a week earlier.

On the ICE Futures US exchange, cocoa for May climbed to US$2,930 a tonne from US$2,777 the previous week.

Sugar prices held firm in quiet trade. By Friday on LIFFE, the price of a tonne of white sugar for delivery in May edged up to US$391.40 from US$382.50 for the March contract a week earlier.

On ICE Futures US, the price of unrefined sugar for May rose to 14.84 US cents a pound from 14.57 US cents.

Prices enjoyed mixed fortunes as traders also eyed prevailing weather conditions in key producers.

By Friday on ICE Futures US, Arabica for delivery in May fell slightly to 166.15 US cents a pound from 166.60 cents a week earlier.

On LIFFE, Robusta for May rallied to US$2,022 a tonne from US$1,927 for the March contract the previous week.

Kuala Lumpur prices drifted lower in subdued trade ahead of this week's Chinese New Year holidays.

The Malaysian Rubber Board's benchmark SMR20 on Friday fell to 141.80 US cents a kilo from 141.85 US cents the previous week. AFP