Crude oil prices spiked Friday and gold and copper rose as anti-government protests in Egypt sparked concerns over regional stability and oil supplies.
The rise in commodity prices came despite a 1% rise in the value of the US dollar against the euro and the firmer US bond prices as some investors looked for a safe haven.
Gold futures jumped $US22.30 to settle at $US1,340.70 an ounce in New York
March crude oil rose $3.70, or 4.3%, to $US89.34 a barrel on the New York Mercantile Exchange. For the week, oil gained 0.3%.
But that was a misleading price as the US contract is being overwhelmed by soaring stocks of unsold oil at the pipeline hub at Cushing in Oklahoma.
A better guide was the Brent oil contract in London.
While the oil involved is of lesser quality, the contract is not impacted by over or under supply like the WTI contract in New York.
Brent rose on Friday to a peak of $US99.63 a barrel, up 2.1% on the week and the highest level since late 2008.
Such was the downward pressure on US prices from the oversupply at Cushing, the Brent premium was $US10 a barrel at the close on Friday, but at one stage last week it was more than $US12 a barrel.
Driving oil was the unrest in Egypt.
While not a significant exporter of oil, crude prices are traditionally very sensitive to potential supply disruptions, and Egypt is home to the Suez canal, a key shipping lane that connects the Red Sea with the Mediterranean.
An estimated 1.8 million barrels per day of crude oil and refined petroleum products flow through the Suez Canal to the Mediterranean Sea.
The worries about Egypt come on top of the sharp rise in oil prices late in 2010.
As the theory goes, unrest in Egypt could destabilize the region, and potentially have a larger impact on crude prices.
Of course, if the crisis is contained, the market impact would be negligible.
But traders point to the way Tunisian protestors toppled the regime of a strong hardline leader, leaving confusion in its place.
Meanwhile, gold was revitalised, posting its biggest gains in eight weeks on Friday.
The rebound ended the down trend that has been evident since the start of January.
The nearly $US40-an-ounce price jump in Friday trading revived investor interest in the metal.
Spot gold rose 2% to $US1,338.39 an ounce, partially reversing Thursday’s 2.6% slump.
Earlier on Friday, spot gold had hit a four-month low of $US1,308.00 an ounce (the futures were down to $US1,307 an ounce).
Comex February gold futures closed $US22.30 an ounce higher at $US1,340.70 an ounce.
Spot silver jumped 3.5% to $US27.92 an ounce.
Despite Friday’s rally, gold finished flat for the week, but silver gained 1.8% over the week.
April platinum turned higher, adding $1.50, or 0.1%, to $1,805 an ounce. For the week, the metal lost 0.9%.
In other metals trading Friday, March Comex copper added 3C, or 0.8%, to settle at $US4.37 a pound.
Copper rose 1.4% last week.
On the London Metal Exchange three month copper rose $US89, or 0.9%, to $US9,530 a tonne ($US4.32 a pound).
Tin climbed as much as 3.2% to end at yet another record of $US30,040 a tonne on the LME.
Tin prices are already up 10% so far this year after the 59% rise in 2010.
Aluminium, lead, nickel and zinc also rose on the LME.
Wheat prices eased because of the Egyptian unrest.
Egypt is the biggest wheat buyer in the world and there’s concern the unrest could cut imports for a while, leaving grain unsold and existing contracts in doubt.
It is forecast to import 9.8 million tonnes of wheat in 2011, according to the US Department of Agriculture.
Chicago prices fell 2.4% on Friday, the biggest fall in three months to end at $US8.2575 a bushel.
The price of Arabica coffee beans hit a 13-year high in New York, while sugar prices fell.
Arabica prices have surged 84% in the past year (and the price of robusta beans, mostly traded in London, is up 64%).
New York March delivery Arabica coffee jumped 8.05c or 3.4%, to $US2.45 a pound after touching $US2.4635, the highest since June 1997.
The commodity rose 1.9% last week.
But raw-sugar futures for March delivery eased 0.7%, to 33.94 USc a pound in New York.
The unrest in Egypt was the factor because the country is also a big importer of sugar (more than 1.1 million tonnes a year).
In London, white sugar futures for March delivery fell 1.2% to $US814.40 a tonne.
