(MENAFN- The Peninsula) Most commodity markets rallied this week, with oil striking a 15-month peak, after US Federal Reserve chairman Ben Bernanke pledged to retain the central bank's easy-money stimulus policy, dealers said.
Many commodities rose after Bernanke declared on Wednesday that the Fed's $85bn-a-month bond-buying programme, commonly known as quantitative easing (QE), was still necessary.
The news poured cold water on expectations that the bank would start to wind it down later this year, which had sent global markets sliding in recent weeks.
"Commodities are ... heading for their best weekly run since 2010 after Bernanke unexpectedly said the US economy will need highly accommodative monetary policy for foreseeable future, fuelling hopes that the end of QE is not nigh," ETX Capital analyst Ishaq Siddiqi said. The Fed's vast stimulus policy was launched last year to support growth of the United States economy, which is a major consumer of most raw materials.
OIL: Global crude oil prices spiked to a 15-month high on the back of the Fed's stimulus pledge, strong US crude demand and Middle East supply fears, but ran into profit-taking heading into the weekend.
New York crude hit $107.45 - a high last seen in late March 2012 - and Brent oil jumped to $108.93, which was a level last witnessed in early April 2013.
"Prices have picked up almost ten percent since the start of the month on a mixture of positive economic data, reassurance of further Fed support and global supply concerns," said analyst Kash Kamal at London-based brokerage Sucden.
Oil slid on Thursday after nearly two weeks of gains driven by concerns about Middle East supplies owing to an escalation in the Syrian conflict and the military coup in Egypt.
However, analysts still remain on tenterhooks over potential disruption from the crude-rich region after the overthrow last week of Egypt's Islamist president Mohammed Mursi by the military. "With no clear signs of a resolution, instability could spread further in the region threatening oil supply and providing a lift to Brent contracts," added Kamal.
Egypt is not a major crude oil exporter but is home to key oil transit points of the Suez Canal and the Sumed Pipeline.
Crude futures also jumped higher this week on new indications of solid energy demand in the United States, which is the world's biggest oil consuming nation. The US government's Energy Information Administration (EIA) revealed on Wednesday that crude inventories had slumped last week, signalling a major pickup in demand.
The EIA said oil stockpiles tumbled 9.9 million barrels in the week ended July 5. That was more than triple market expectations.
By Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in August jumped to $108.80 a barrel from $107.35 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for August rallied to $105.65 a barrel compared with $102.93 a week earlier.
PRECIOUS METALS: Prices forged higher in line with most commodities. Gold futures had last month tumbled close to a three-year low under $1,200 an ounce, hit by receding inflation fears, upbeat US data, a strong dollar and expectations of an end to US stimulus measures.
By late Friday on the London Bullion Market, the price of gold gained to $1,279.75 an ounce from $1,212.75 a week earlier. Silver grew to $19.66 an ounce from $19.32. On the London Platinum and Palladium Market, platinum increased to $1,403 an ounce from $1,327. Palladium advanced to $719 an ounce from $669.
BASE METALS: Base or industrial metal prices mostly rose in value. "Dovish comments from the Fed Chairman acted as a catalyst for some broad-based short covering in base metals this week," said Barclays analysts.
By Friday on the London Metal Exchange, copper for delivery in three months rallied to $6,979.5 a tonne from $6,783 a week earlier. Three-month aluminium gained to $1,845.75 a tonne from $1,783. Three-month lead rose to $2,076.50 a tonne from $2,007.75. Three-month tin eased to $19,540 a tonne from $19,690. Three-month nickel climbed to $13,638 a tonne from $13,526. Three-month zinc advanced to $1,905 a tonne from $1,826.50.
COCOA: Prices wobbled but ended the week on a firm note. "Favourable and unfavourable weather in the Ivory Coast has also been moving the market up and down," said The Public Ledger commodities analyst group.
By Friday on LIFFE, London's futures exchange, cocoa for delivery in September climbed to £1,558 a tonne from £1,542 a week earlier. On New York's NYBOT-ICE exchange, cocoa for September increased to $2,253 a tonne from $2,241.
COFFEE: Prices gained more ground. "London rose to five-week highs on origin forecasts of lower Vietnamese exports," added The Public Ledger. By Friday on NYBOT-ICE, Arabica for delivery in September advanced to 124.25 US cents a pound from 122.50 cents a week earlier. On LIFFE, Robusta for September grew to $1,896 a tonne from $1,823.
SUGAR: Sugar prices slid to fresh three-year lows, weighed down by expectations of abundant supplies in key producer Brazil.
London prices sank on Thursday to $461.10, the lowest point since June 2010, while New York hit a similar trough at 16.08 cents. By Friday on NYBOT-ICE, the price of unrefined sugar for delivery in October fell to 16.16 US cents a pound from 16.45 cents a week earlier. On LIFFE, the price of a tonne of white sugar for October slipped to $462.20 from $476.80.
RUBBER: Rubber declined on expectations of a demand slowdown from China, which is the world's biggest consumer of the commodity. The Malaysian Rubber Board's benchmark SMR20 fell to 221.00 US cents a kilo from 224.15 cents the previous week.
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