Oil prices rise awaiting Greece, Iran outcomes

GMT 02:15 2015 Saturday ,27 June

Arab Today, arab today Oil prices rise awaiting Greece, Iran outcomes

US crude oil
London - AFP

Oil prices rose over the week despite the crude market facing pressure from high supplies, as traders awaited deals over Greece's bailout and Iran's nuclear programme.

OIL: The weekly US industry report showed domestic output still high and commercial fuel inventories at generous levels in the world's biggest consumer of crude.

US crude output edged up to a record 9.6 million barrels a day in the goldweek to June 19, while stockpiles stayed at a near-record 463 million barrels.

Heading into the weekend, the focus was on Greece and Iran.

Crude investors were weighing the "potential negative impact from Greece's debt crisis on European energy demand," Singapore's United Overseas Bank said in a market commentary.

Greece's international creditors on Friday offered Athens a five-month, 12-billion-euro ($13.4-billion) extension of its bailout programme but said it must seal a deal this weekend to avoid an IMF default next week.

According to the proposals seen by AFP, the creditors are ready to quickly disburse 1.8 billion euros in financial aid to help Athens meet a 1.5 billion euro IMF debt repayment due on June 30 as long as the Greek parliament approves disputed reforms.

Dealers are also keeping a close watch as Iran and major Western powers race to agree a deal also by June 30 that would see Tehran open up its nuclear programme to allay concerns it is seeking atomic weapons, in return for the West lifting punishing economic sanctions.

However efforts to finalise the historic nuclear deal with Iran remain stuck on several issues, diplomats from both sides said Friday as US Secretary of State John Kerry headed to Vienna for weekend talks.

Any agreement could result in Iranian crude returning to the world market, adding to the current oversupply which sent prices plunging from more than $100 a barrel last year.

By Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in August climbed to $63.25 a barrel from $62.66 a week earlier for the expired July contract.

On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for August stood at $59.59 a barrel compared with $59.40 a barrel for the expired July contract one week earlier.

- Dollar dents gold -

PRECIOUS METALS: Gold came under pressure from a robust dollar which made the metal more expensive for holders of rival currencies.

The euro dropped to $1.1130 on Friday -- the lowest level for almost three weeks.

"There have been some signs of dollar momentum returning among investors and this has reflected in losses for gold," said Jameel Ahmad, chief market analyst at trading group FXTM.

"Economic data continuing to show that the US economy is rebounding strongly... has provided further assurances to the markets that the Federal Reserve should be raising US interest rates in the next couple of months."

By Friday on the London Bullion Market, the price of gold dropped to $1,170.50 an ounce from $1,203.40 a week earlier.

Silver declined to $15.83 an ounce from $16.12.

On the London Platinum and Palladium Market, platinum edged down to $1,074 an ounce from $1,085.

Palladium retreated to $676 an ounce from $718.

BASE METALS: Base or industrial metals prices mostly fell as investors tracked Chinese data and its impact on demand.

"Early business survey evidence for June supports our relatively positive view on the outlook for China's commodity demand, especially metals," Capital Economics research group said in a statement.

"The latest eurozone data are encouraging too, although we remain wary of the potential fall-out from a renewed escalation of the crisis in Greece," it added.

HSBC's report on Chinese manufacturing came in at its strongest for three months.

The preliminary Purchasing Managers' Index (PMI) stood at 49.6 in June. While it is still below the break-even point of 50 it beat May's final reading of 49.2 as well as a forecast of 49.4 in a survey of economists by Bloomberg News.

By Friday on the London Metal Exchange, copper for delivery in three months rose to $5,758.50 a tonne from $5,667.50 a week earlier.

Three-month aluminium gained to $1,709.50 a tonne from $1,690.50.

Three-month lead edged down to $1,787 a tonne from $1,792.

Three-month tin decreased to $14,865 a tonne from $15,210.

Three-month nickel slid to $12,560 a tonne from $12,620.

Three-month zinc dropped to $2,026 a tonne from $2,052.

- Cocoa rallies -

COCOA: Prices hit six-month highs against a backdrop of tight supply, reaching £2,180 a tonne in London and $3,316 a tonne over in New York.

Some profit-taking set in thereafter.

By Friday on LIFFE, London's futures exchange, cocoa for delivery in September nudged higher to £2,161 a tonne from £2,155 a week earlier.

On the ICE Futures US exchange, cocoa for September dipped to $3,274 a tonne from $3,296 a week earlier.

SUGAR: Prices rebounded from six-year lows that were caused by abundant supplies.

"A mountain of sugar has been the catalyst for prices falling," noted Capital Economics analyst Hamish Smith.

By Friday on LIFFE, a tonne of white sugar for delivery in August grew to $362.80 from $346.30 a week earlier.

On ICE Futures US, unrefined sugar for October rose to 12.09 US cents from 11.67 cents a week earlier.

COFFEE: Prices of the commodity advanced owing to a drop in exports from main producers Vietnam and Brazil.

On ICE Futures US, Arabica for delivery in September gained to 136.75 US cents a pound from 131.90 cents a week earlier.

On LIFFE, Robusta for September increased to $1,818 a tonne from $1,784.

RUBBER: Prices declined mainly on concerns of falling Chinese demand.

On Friday, the Malaysian Rubber Board's benchmark SMR20 fell to 155.00 US cents a kilo from 157.05 US cents a week ago.

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