07.07.2008 11:03

COMMODITIES: weekly review

Crude oil increased 3.3% last week to $144.18 a barrel on speculation tension in the Middle East may get worse. The rise in energy prices, however, masked losses in base metals and some agricultural commodities. The price increases were supported by a fall in US crude stocks and a bullish report by the International Energy Agency. An easing in the dispute between Iran and western countries about Tehran’s nuclear programme on Friday triggered profit-taking.

Iran said it gave a ``constructive'' response to incentives intended to persuade the country to stop uranium enrichment. A compromise may allay concern that Israel is ready to attack Iran's nuclear installations, starting a conflict likely to cut supply from OPEC's second-largest oil producer.

Futures climbed to a record $145.85 a barrel yesterday on speculation tension in the Middle East may worsen. Crude oil for August delivery settled at $144.04 a barrel, while Brent crude oil for August settlement was at $144.42 a barrel. Futures climbed to $146.69 Thursday, a record intraday price. Brent traded higher than its U.S. equivalent for a third day, at a premium of 38 cents, on expectations that seasonal maintenance this month will curb output from North Sea fields.

Gold fell Thursday, but managed to close the week higher. Gold had its biggest gain this week on July 1 after ABC News reported Israel was likely to attack Iran, sending oil up as much as 2.4%. The metal has climbed 43% in the past year as the weaker dollar spurred demand for a hedge against declines in the U.S. currency against the euro. Gold for immediate delivery closed the week at $932.38 an ounce, gaining 0.5%.

All the base metals ended the week down, apart from aluminium, which rose 1.5% to $3,166 a tonne. Lead collapsed 12% on the week to $1,565 a tonne.