05.05.2008 08:48

COMMODITIES: weekly review

Oil prices fell last week as the dollar rose to a five-week high against the euro after the smaller-than-expected job loss last month, which may indicate the labor market is weathering the economic slowdown. When the dollar rises, commodities often fall because they lose appeal as a hedge against inflation. Oil touched a record $119.93 a barrel on April 28, as the dollar dropped.

Crude oil rose more than $3 a barrel Friday after a report showed that the U.S. lost fewer jobs than forecast in April and as Turkey renewed its military offensive against Kurdish rebels in Iraq. Iraq's northern region is controlled by a semi-autonomous Kurdish administration. Kirkuk, at the center of the region's biggest oil field, is about 100 miles (161 kilometers) from the Turkish border.

The Organization of Petroleum Exporting Countries won't consider increasing crude-oil production before it meets in September because the market is well supplied, Qatari Oil Minister Abdullah al-Attiyah said Friday. The 13-member group is responsible for more than 40% of the world's oil output.

Crude oil for June delivery declined to $116.32 a barrel. Futures, which have climbed 83% from a year ago, are down 1.9% last week. Brent crude oil for June settlement weakened to $114.56 a barrel.

Precious metals retreated too with gold closed the week 3.2% down at $858 an ounce. The metal fell the third straight week. Gold hadn't fallen for three weeks in a row since May 25, 2007. In another precious-metal market, silver futures declined to $16.465 an ounce, 2.9% for the week, the second straight weekly drop. Platinum slipped to $1,908.20 (-3% for the week).

In base metals, the copper conundrum continued, with the red metal torn between weak Chinese buying interest because of high prices and supply disruptions in Chile where strikes are affecting Codelco, the world’s largest producer. Copper fell 1.8% to $8415 a tonne last week. Codelco, the world’s largest producer, is reported to have asked some US customers to consider delaying orders if strikes in Chile continue.