A summary of trading in key commodities markets overseas:
ENERGY
World oil prices picked up Thursday on news that German lawmakers had approved an expansion of the eurozone’s rescue fund, while sentiment was also lifted by hopeful economic data in the United States.
New York’s main contract, West Texas Intermediate (WTI) for delivery in November, rallied 93 US cents to $US82.14 a barrel.
In London, Brent North Sea crude for November added 14 US cents to $US103.95 per barrel.
The German parliament vote to approve the July 21 new Greek bailout package and expansion of the EU emergency fund encouraged new hopes that the Greek debt crisis could be managed without it fracturing the eurozone.
Meanwhile in the US, the government revised upward its growth estimate for the second quarter to 1.3 per cent, still sluggish but better than the earlier estimate of 1.0 per cent.
In addition, the Labor Department reported a sharp fall in new applications for jobless insurance last week, though analysts called that a likely statistical aberration.
Energy officials in Baghdad said the pipeline connecting Iraq to the Turkish port of Ceyhan had been shut down because of “technical problems”.
The pipeline transports 450,000 to 500,000 barrels of crude oil per day to Ceyhan.
In Colombia, Latina America’s third largest oil producer after Venezuela and Brazil, suspected leftist guerrillas attacked a pipeline in northeastern Colombia, the army said, in the latest assault on the country’s vital oil sector.
PRECIOUS METALS
Gold rose modestly on optimism that Germany’s vote to beef up the eurozone’s bailout fund will avert that region’s debt crisis.
Bullion stemmed this week’s brutal correction after Federal Reserve Chairman Ben Bernanke hinted at new stimulus measures if inflationary pressures ease. Economic optimism was also fuelled by a five-month low in US initial claims for jobless benefits.
Spot gold was up 0.3 per cent at $US1,612.50 an ounce by 3.21pm EDT (0621 AEDT).
US gold futures for December delivery settled down 80 US cents at $US1,617.30 an ounce, giving up earlier gains. Volume was lower than usual as some bullion traders were off for the Jewish New Year holiday.
Gold futures open interest – a gauge of overall investor sentiment – fell to a near two-year low after prices tumbled nine per cent in the past six sessions on a margin hike and heavy fund selling to cover losses in other markets.
In the past eight sessions, COMEX gold’s open interest has dropped by more than 50,000 lots, equivalent to five million ounces or more than $US8 billon at current prices.
Bullion found support in news that Germany’s lower house approved new powers for the European Financial Stability Facility (EFSF) and Bernanke’s remarks that the central bank could ease monetary policy further if inflation or inflation expectations fall significantly.
Physical gold demand in Asia has been extremely strong as prices retreated from record highs. Premiums for gold bars were the strongest since at least February in Singapore and Hong Kong and the highest in a year in India.
Meanwhile, holdings of gold-backed exchange-traded funds have remained relatively strong.
Silver was up 1.6 per cent at $US30.34 an ounce. Silver prices sustained hefty losses this month, plunging more than a quarter as support from higher gold prices evaporated.
Among platinum group metals, spot platinum was down 0.3 per cent at $US1,517.49 an ounce, and palladium climbed 0.2 per cent to $US617 an ounce.
Platinum retained its unprecedented discount to gold prices as buyers worried a more anemic economic environment would weigh on demand for industrial precious metals.
BASE METALS
Copper ended lower, setting the stage for its worst quarterly performance since fourth-quarter 2008 as macro-economic pressures continued to dog sentiment and paint an overall bearish picture for demand this year.
For the second time this week, prices broke down below the $US7,000 per tonne level as ongoing worries about a potential debt default in Greece, uncomfortably high unemployment in the United States and tighter monetary policy in China withdrew investor confidence and left prices to flounder near their lowest levels in 14 months.
A round of better US economic data, renewed supply-side threats in Peru and approval from the German parliament to beef up a rescue fund for the euro zone lifted sentiment, enabling the market to regain its footing above $US7,000 by the close.
London Metal Exchange (LME) benchmark copper closed at $US7,230 a tonne, only slightly down from a last bid of $US7,250 tonne on Wednesday.
In New York, the key December COMEX contract eased 0.05 US cent to settle at $US3.2460 per lb, after dealing in a wide 20-cent range between $US3.08 and $US3.2895.
Volumes remained elevated amid the sharp price fluctuations this week.
More than 71,000 lots were traded in New York, about 50 per cent above the 30-day norm, according to Thomson Reuters preliminary data.
Markets breathed a sigh of relief on Thursday after German deputies rallied behind Chancellor Angela Merkel to approve a stronger euro zone bailout fund.
US data later in the day added further support to prices. The number of Americans claiming new jobless benefits fell to a five-month low last week, while the US economy grew slightly more than previously reported in the second quarter – both optimistic signs that a recession was not in the cards.
The start of an indefinite strike at Freeport-McMoRan’s Cerro Verde mine in Peru, which produces around two per cent of the world’s copper, provided an additional layer of support.
Tin closed up $US125 at $US20,675 a tonne. The market was now in backwardation, with premiums for cash material at a $US4 premium against the three-months as supply-side threats deepened this week.
US tin premiums began to perk up this week, as dealers expected an export ban from Indonesia will tighten domestic business flows as early as November this year.