Oil prices bounce above 74 dollars on Iran news

LONDON (AFP) - Oil prices jumped above 74 dollars this week as traders digested news that Iran had seized a disputed Iraqi oil well and looked at signs of strengthening US energy demand, dealers said.
Elsewhere, cocoa hit its highest levels for around 30 years, sugar struck a 28-year peak and many base metals chalked up multi-month highs as players took their cue from more positive economic data.
Trading volumes were low ahead of the weekend, with many markets winding down for the Christmas and New Year festivities.
OIL: The market rallied Friday as the prospect of an Iranian-Iraqi dispute highlighted simmering tensions in the oil-rich Middle East before gains were pared by profit-taking. Oil was boosted by reports of Iranian troops marching over the Iraqi border and laying claim to a dormant oilfield in disputed territory, said CMC Markets analyst Michael Hewson.
Brent North Sea oil bounced as high as 74.84 dollars a barrel and New York jumped as high as 74.69 dollars on the news.
Iranian forces took control of a southern Iraqi oil well on a disputed section of the border on Friday, US and Iraqi officials told AFP.
There has been no violence related to this incident and we trust this will be resolved through peaceful diplomacy between the governments of Iraq and Iran, a US military spokesman told AFP at Contingency Operating Base Adder, just outside the southern Iraqi city of Nasiriyah. The oil field is in disputed territory in between Iranian and Iraqi border forts, he said, adding that such incidents occur quite frequently.
Well 4 lies in the Fauqa Field, part of a cluster of fields Iraq unsuccessfully put up for auction to oil majors in June. The field has estimated reserves of 1.55 million barrels.
Oil fell sharply on Thursday as investors took profits following sharp gains on Wednesday on indications of stronger US energy demand. Analysts said US demand, boosted by the need for heating fuel during the northern hemisphere winter, is likely to continue supporting oil prices. The market also got a boost from the latest snapshot of US inventories.
The US Department of Energy (DoE) said distillate stockpiles sank by a larger-than-expected 2.9 million barrels last week, indicating a pick-up in heating fuel demand.
Data for distillates, which include heating oil, are being closely tracked as winter starts to bite in the United States and Europe.
On Tuesday, the OPEC oil producers cartel upgraded slightly its forecast for world oil demand growth next year but said usage in advanced economies would contract again. The Organization of Petroleum Exporting Countries is set to hold a meeting to discuss output on December 22 in the Angolan capital Luanda.
By Friday on the New York Mercantile Exchange (NYMEX), light sweet crude for delivery in January had jumped to 74.14 dollars from 69.79 dollars a week earlier.
On Londons InterContinental Exchange (ICE), Brent North Sea crude for February delivery rallied to 74.50 dollars compared with 71.45 dollars for the expired January contract a week earlier.
PRECIOUS METALS: Prices mainly fell as traders tracked the rising dollar, which makes dollar-priced commodities more expensive for buyers using other currencies and so tends to dampen demand, analysts said.
Gold sank further from its record high of 1,226.56 dollars an ounce seen at the start of December.
Gold prices have lost huge ground on the back of the stronger US dollar, said Commerzbank analyst Carsten Fritsch.
Position-squaring and profit-taking will also play a role in the run-up to the festive holidays as investors still have very positive positions on the gold market, Fritsch added. Earlier Friday, the euro struck a three-month dollar low as the foreign exchange market fretted over the Greek debt crisis, analysts said. The European single currency tumbled as low as 1.4268 dollars, plumbing depths last seen on September 4.
Greece was facing up on Friday to a crucial budget debate this weekend as the country struggles to confront its massive debt, which has put pressure on the euro and alarmed markets worldwide.
By late Friday on the London Bullion Market, gold dropped to 1,104.50 dollars an ounce from 1,124 dollars a week earlier.
Silver slid to 17.31 dollars an ounce from 17.51 dollars.
On the London Platinum and Palladium Market, platinum retreated to 1,417 dollars an ounce at the late fixing on Friday from 1,429 dollars the previous week.
Palladium rose to 365 dollars an ounce from 337 dollars.
BASE METALS: Base metals prices chalked up a series of multi-month highs, with aluminium at one stage hitting 2,305 dollars per tonne its highest since October 2008 before slipping back.
Lead hit 2,525 dollars per tonne, the best level since May 2008, while zinc rose as high as 2,442 dollars a tonne, last seen in March last year.
Prices (are) generally higher ... as better-than-expected eurozone data adds the firming expectation of imminent improvements in OECD demand levels, said Barclays Capital analysts in a research note. By Friday on the London Metal Exchange, copper for delivery in three months rose to 6,881 dollars a tonne from 6,850 dollars a week earlier.
Three-month aluminium eased to 2,256 dollars a tonne from 2,277 dollars. Three-month lead rose to 2,346 dollars a tonne from 2,307.50 dollars. Three-month tin increased to 15,900 dollars a tonne from 15,200 dollars. Three-month zinc firmed to 2,440 dollars a tonne from 2,305 dollars. Three-month nickel jumped to 17,200 dollars a tonne from 16,525 dollars.
COCOA: Cocoa prices hit their highest levels for around 30 years on the back of positive economic data and amid concerns about supplies from leading producer Ivory Coast, analysts said.
In London, cocoa struck 2,337 pounds a tonne a level last seen in October, 1977. New York prices soared to 3,510 dollars per tonne, which was last hit in March 1979, before running into profit-taking.
Barclays Capital analysts said prices were lifted by generally better-than-expected economic data from the United States and Europe.
By Friday on LIFFE, Londons futures exchange, the price of cocoa for delivery in May stood at 2,265 pounds a tonne compared with 2,293 pounds a week earlier. On the New York Board of Trade (NYBOT), the March cocoa contract eased to 3,359 dollars a tonne from 3,415 dollars.
SUGAR: Sugar prices rallied, hitting their highest level since 1981, owing to tight supplies and keen demand, traders said.
Sugar prices set yet another fresh 28-and-a-half-year high, with a supportive fundamental backdrop supporting price gains, Barclays Capital analysts said.
By Friday on LIFFE, the price of a tonne of white sugar for delivery in March climbed to 678.20 pounds from 620.50 pounds a week earlier.
On NYBOT, the price of unrefined sugar for March rose to 26.27 US cents a pound from 23.30 cents.
GRAINS AND SOYA: Grains and soya prices were easier as traders tracked colder weather in key producer the United States.
By Friday on the Chicago Board of Trade, maize for delivery in March slipped to 3.94 dollars a bushel from 4.04 dollars a week earlier. March-dated soyabean meal used in animal feed eased to 10.26 dollars from 10.43 dollars. Wheat for March decreased to 5.18 dollars a bushel from $5.37.
COFFEE: Coffee prices were mixed. By Friday on LIFFE, Robusta for delivery in March dipped to 1,374 dollars a tonne from 1,388 dollars a week earlier.
On the NYBOT, Arabica for March increased to 146.25 US cents a pound from 141.35 cents.
RUBBER: Malaysian rubber prices rose on positive sentiment following Chinas announcement that it will cut rubber import duties, dealers said.
We saw renewed interest. We expect more traders to re-enter the market soon, a dealer told Malaysian national news agency Bernama. China is the worlds largest rubber consumer.
On Thursday, the Malaysian Rubber Boards benchmark SMR20 climbed to 273.45 US cents per kilo, from 271.80 cents the previous week. The Malaysian market was closed on Friday for a public holiday.