LONDON, Aug 7: The price of Brent North Sea oil shot up to its highest level in 15 months this week thanks to a two-day general strike in Nigeria in support of a five-week-old political strike by oil field workers, reports AFP.
The price’ bolted to 19.41 dollars a barrel Monday, but settled back to around 18.50 dollars towards the end of the week, comparable with last Friday's close.
Experts were wondering if the striking oil workers, who were-demanding the release of Jailed opposition leader Moshood Abiola and his installation as president, would stick to their action.
Nigeria, a member of the Organisation ' of Petroleum Exporting Counties (OPEC), pumps some two million barrels of crude a day. about 3 per cent of world production.
Shell, which accounts for half of Nigeria's production, suspended deliveries for several days, invoking the "force majeure" clause because its production had dropped by" more than one third. Elf said it might take similar action.
Precious metals, meanwhile, lost ground after a general strike that had been threatened for next week in South Africa, leading gold and platinum producer, was called off.
On the London Metal Exchange ( LME). copper, nickel and aluminium prices fell on fears of a drop in demand from the-US automobile • and home construction sectors.
Sugar prices were supported by fears that a heat wave would damage Britain's sugar-beet crop.
GOLD: Slight fall. Already depressed by an early week strengthening of the. dollar, prices dropped slightly during the week as fears of a general strike in South Africa faded with the settlement on Wednesday of a dispute at the Pick N Pay supermarket chain.
The price of an ounce pf gold, still at 383.90 dollais at the end of last week, dropped to 378.20 dollars at Thursday’s close.
An explosion that killed. 11 in the Progera Mine in Pa^ua New Guinea, one‘of the largest outside South Africa with an .production of one million ounces, provoked market concern.
■ On Thursday, however, workers . were back in the mine and. although no reopening date was set. steps were in the works to resume production.
SILVER: Falls. Like gold and other precious metals, silver fell victim to investment fund sales, said the GNI Brokerage House.
Silver closed at 5.21 dollars per dunce Thursday, against 5.35 dollars at the end of, last week.
PLATINUM: Falls. Victim of a strengthening dollar early in th^ week and investment fund
The threat of an "auto Industry strike in South Africa, ma-
jor consumer of catalytic converters. eased off with resumption of negotiations on Wednesday.
Platinum closed at 404.25, dollars an ounce on Thursday, five dollars down from last week's close of 419.50 dollars.
COPPER: Falls. Three month deliveries were off some 30 dollars a tonne, closing Thursday at 2,415 dollars per tonne on the .LME. Prices were dampened by disappointing US automobile and housing sales figures, and by a weekly increase of 1,900 tonnes in LME stocks to 340,000 tonnes, after a 27 week faff.
An analyst at Commodities Research Union predicted US demand for copper would increase by only 2-2.5 per cent in the second half against 13 . per cent in the first half due to heavy user stocks.
There were, meanwhile, rumours in the market that some 60.000 tonnes of copper was waiting on Russia's borders for shipment to European destinations.
The only positive sign was a report in the official China Daily that China was preparing to Import at least 100.000 tonnes of copper in the second ' half, according to London traders GNI. that would bring annual Imports to 300.000 tonnes, not sizeable but bigger • than predicted.
LEAD: Steady. Prices fell 4.5 dollars to 596.5 dollars
per tonne while LME stocks increased by 3,850 tonnes to 360.775 tonnes.
GNI said first half exports by China jumped by 177 per cent to 79,000 tonnps.
ZINC: Steady. Prices closed at 964 dollars per tonrte, down a dollar. A 1,625 tonne increase in LME stocks, to 1.215,700 tonnes had no" visible effect.
ALUMINIUM: Slight fall. Prices lost 22 dollars per tonne to 1.457 dollars, following copper and nickel. Traders remained optimistic for a rise in prices, noting a 13 per cent fall in Brasilian exports for the first half of 1994. compared with the same period last year.
Another positive sign was a fall in LME stocks of 11.850 tonnes to 2.512.100 tonnes.
NICKEL: Falls. A 95 dollar per tonne fall to 6.210 dollars, was blamed on an influx of Russian summer deliveries into LME stocks. The price was also depressed by poor US automobile and housing sales figures, which raised fears of a drop In demand for nickel.
Nickel cut its losses somewhat towards the end of the week. On speculation that . union negotiations at the Canadian producer Falcon-bridge might end in a strike. Contracts there run out on August 31. Meanwhile, an, accident in the Thompson Mine in Manitoba. Canada, threatened to cut production
here by 8 inillion pounds in August and September, according to the trade paper Metal Bulletin, which quoted the company. Thompson said, however, that deliveries would be guaranteed from its stocks and would remain unaffected.
LME stocks rose 798 tonnes to 134.142 tonnes.
TIN: Falls. Prices fell by 160 dollars, per tonne to 5,125. affected by reports that China had exported 24,700 tonnes in the first half, exceeding its Association of Tin Producing Countries (ATPC) quota of 20.000 tonnes.
LME slocks rose by 326, tonnes to 31.010 tonnes.
COCOA: Fall. Prices, which the previous Friday had attained their highest level since January 1989 (1.124 pounds per tonne), suffered from profit taking and finished the week around 1,070 pounds.
They had been recently boosted by recent tAars of drought in the Ivory Coast and Crisis in Nigeria, the world's sixth largest producer with a 1993-94 estimated harvest of 135,000 tonnes. But. according to London brokers GNI, "Nigeria, is now between harvests and only a prolonged conflict would affect the next harvest," which begins in ' October.
Ivory Coast authorities, meanwhile, said Indonesia (third largest world producer with 260.000 tonnes) was to
join the Cocoa Producers Alliance "very soon." which would allow for tighter controls on worldwide production and marketing.
COFFEE: Rise. Prices rose 200 dollars to close Thursday at 3.616 dollars per tonne, propped by fears of drought in Central America and concern over the quality of Brazilian coffee stocks.
Fears that temperatures could fall below freezing in Brazil, after two serious freezes hit the growing regions in recent weeks, also contributed to the boost In prices.
The Brazilian government said it would sell off "five million bags of coffee on the domestic market." to bring down prices it Judged to be too high.
The International Coffee Organisation (ICO), meanwhile, reported a 1.2 per cent drop In exports by its members in June, to 6.1 million 60-kilo-gram (132-pound) bags. Exports totalled 71.9 million bags between July 1993 and June 1994. a fall of 7.6 per cent from the 12 preceding months.
SUGAR: Recovery after weak start. Depressed by a lack of movement of the physical market at the beginning of the week, prices rose on rumours of Chinese buying, and signs that a European heatwave had damaged the British sugar-beet crop.
Producer British Sugar said
first samples of the 1994/95 crop showed an average sugar content of 12.99 per cent, with 14.54 per cent in 1993-94.
London traders said their counterparts in Hong Kong were expecting China to soon begin buying in large quantities, and attention was turning increasingly to China now that India had completed most of its buying for the season.
VEGETABLE OILS: Irregular. Most vegetable oils were steady on the Rotterdam Exchange, except for palm and coconut oils which dropped slightly.
The Hamburg-based trade paper. Oil World, said stocks of the six major oils being held by 19 exporting and consumer countries had fallen 21 per cent to 3.98 million tonnes on July 1 compared with the previous year. Oil World attributed the drop to strong world demand and weak production. with palm and soybean oil stock particularly low.
Oil World predicted a 10.3 per cent increase, to 11.6 million tonnes. In net US soybean exports between September 1994 and February 1995 compared with th? same period in 1993-94. The paper said the US exported 18.6 million tonnes between March and August 1994. a 4.5 per cent Increase.
OIL: Strong. The price of Brent North Sea oil fluctuated
with the UPS and downs of a five-week oil strike in Nigeria, fifth largest producer in the Organisation of Petroleum Exporting Countries (OPEC).
On Monday, the price of a barrel broke the 19 dollar mark, reaching 19.41 dollars, its highest since May 1993.
OU unions were holding fast in the dispute, and operators said the 125.000-barrel-a-day Brass Field might have to be shut down.
North Sea oil production would normally take up the slack of a drop in Nigerian output. But experts said that would be offset by a drop in British and Norwegian production due to seasonal maintenance.
Oil prices were also propped up by the monthly report of the International Energy Agency, which said demand within countries of the Organisation of Economic Cooperation and Development (OECD) for July was 100.000 barrels a day more than forecast, to 38.5 million barrels a day ,-i
The price of a barrel closed 1 Thursday at 18.42 against 18.59 the previous Friday.
RUBBER: Falls Prices dropped 90 pounds a tonne In London to 960 pounds, due to weakened summer demand in Europe and the US. In Tokyo, however, prices shot up on the strength of speculative buying that London dealers were at a lose to explain.
They noted Chinese buying, but predicted it would soon fall off because China was said to' be holding large stocks.