Oil prices are back in the frame as investors wonder if the continuing protests in Teheran and the violent suppression of them by the government mean more upward pressure on commodity prices.
As well, reports of continuing attacks on oil facilities in Nigeria added to the volatility on Friday caused by the unrest in Teheran.
Concerns about political developments in Iran, OPEC’s second largest producer, following disputed presidential elections there.
The violent attempts to stop weekend marches and protects has raised concerns about Iran, which is the second biggest producer in OPEC.
There’s no sign yet of any dislocation that might hurt the economy or oil production, but markets have a wary eye.
The problems in Iran back in the 1979-81 period, with the Islamic revolution, the US hostages drama at the Embassy, helped usher in the second oil shock, a short resources boom, led by high prices and the very nasty recession from 1982.
So far the protests are in the capital with no signs of them spreading to other parts of the huge country of 74 million people.
But the deaths of at least 10 people, arrests of people associated with protest leaders and the brutality shown towards them, is fuelling worries the oil market will take fright and jump sharply.
New York’s main futures contract, WTI light sweet crude for delivery in July, shed $US1.82 from Thursday’s close to end at $US69.55 a barrel after climbing past $US72.
In London trade, Brent North Sea crude for August delivery dropped $US1.87 to $US69.19 per barrel.
Oil fell Friday to close in the US under the $US70 a barrel mark after hitting an 8.5-month high of $US73.23 last week.
July Nymex West Texas Intermediate futures rose to a weekly high of $US72.77 but finished the week down 4.4% at $US69.55 a barrel.
The August contract, which becomes the front month contract tonight our time), traded at $US70.02 a barrel.
In London ICE August Brent, was down 2.4% at $US69.19.
Goldman Sachs restated its bullish predictions for crude, saying there would be an improvement in fundamentals underpinning energy prices in the third quarter.
The firm now says it sees oil hitting $US85 a barrel by the end of the year. That would be over double the price at the end of 2008.
But some analysts reckon the Goldman prediction is like their prediction a year ago for oil to hit $US200 a barrel by the end of 2008.
It just didn’t happen as prices peaked at just over $US147 a barrel on July 11 and then tipped over to bottom out in December and early January just over $US32 a barrel.
Gold, another commodity that usually gets a boost from situations involving oil and the Middle East, was quiet Friday, rising $US1.60 an ounce to $US936.20 an ounce on Comex in New York. It lost 0.5% last week.
Copper, another ‘hot’ commodity in the first half of 2009, briefly eased below $US5, 000 a tonne on fears of oversupplied markets and high stocks. It recovered to end the week at $5,020 a tonne, down 3.8%.
That was the metal’s first weekly fall for a month.
Among other LME metals, three-month aluminum rose 2.3% to $US1, 680 a tonne; lead was up 1.2% at $US1, 695 a tonne and zinc rose 0.8% to $US1, 576 a tonne. Nickel was up 1.3% to $US15, 200 a tonne.
