LONDON (AFP) - Oil prices rallied and sugar futures struck 28-year highs this week amid light trading volumes, with markets winding down activities ahead of the Christmas and New Year festive season. OIL: Oil prices jumped as a larger-than-expected drop in US energy stockpiles led to hopes of rising demand, traders said. Data released by the US Department of Energy on Wednesday showed stockpiles of crude dropping by 4.9 million barrels to 327.5 million in the week ending December 18, far above analyst expectations of a 1.1 million-barrel drawback. Distillate inventories also slid 3.1 million barrels last week, against analyst forecasts of a 1.6 million barrel fall. Data for distillates, which include heating oil, is in focus as winter starts to bite in the United States and Europe. Analysts cautioned however that despite the fall in stockpiles, inventory levels were still high. Crude oil stocks are still lingering near the upper end of the five-year range, thus creating doubt in our mind as to the underlying strength of the recent price rally, MF Global analyst Tom Pawlicki said. Oil prices have meanwhile risen for much of the week as traders bet on improving demand after OPEC decided against changing the cartels official crude output levels. The Organization of Petroleum Exporting Countries, as expected, held its crude output quotas unchanged at its meeting in Angola Tuesday, warning of lingering weakness in the world economy. Tuesdays meeting capped a year of recovery for oil prices, which have more than doubled since the cartel set strict quota cuts in the depths of the economic crisis a year ago. In January the cartel enforced total OPEC cuts of 4.2 million barrels a day, which helped prices recover from around 32 dollars one year ago. Meanwhile last week, OPEC slightly upgraded its forecast for world oil demand growth next year but said usage in advanced economies would contract again. Several of the cartels members have said the current price of oil is comfortable for them. By Thursday on the New York Mercantile Exchange (NYMEX), light sweet crude for delivery in February jumped to 77.02 dollars from 74.14 dollars the previous Friday. On Londons InterContinental Exchange (ICE), Brent North Sea crude for February delivery advanced to 75.63 dollars compared with 74.50 dollars. PRECIOUS METALS: Gold and silver prices steadied, while platinum and palladium rose. Gold managed to stay above 1,100 dollars in the wake of recent profit-taking following its run-up to a record high of 1,226.56 dollars an ounce at the start of December. The dollar continued to determine price direction for the precious complex, said James Moore, an analyst at the bullion-desk.com. The US currency has weakened recently, lending support to gold, which is seen as a safe-haven investment. By Thursday on the London Bullion Market, gold stood at 1,104.50 dollars an ounce, unchanged from the previous Friday. Silver edged up to 17.32 dollars an ounce from 17.31 dollars. On the London Platinum and Palladium Market, platinum increased to 1,456 dollars an ounce Thursday from 1,417 dollars the previous Friday. Palladium rose to 377 dollars an ounce from 365 dollars. BASE METALS: Base metals prices mostly extended recent gains, with zinc and tin enjoying multi-month highs on fund buying. The market shook off worse than expected economic data, which does suggest ongoing fund interest is keeping the market buoyant, said analysts at basemetals.com. By Thursday on the London Metal Exchange, copper for delivery in three months jumped to 7,070 dollars a tonne from 6,881 dollars a week earlier. Three-month aluminium fell to 2,249 dollars a tonne from 2,256 dollars. Three-month lead dipped to 2,346 dollars a tonne from 2,356 dollars. Three-month tin increased to 16,100 dollars a tonne from 15,900 dollars. Three-month zinc firmed to 2,525 dollars a tonne from 2,440 dollars. Three-month nickel jumped to 18,721 dollars a tonne from $17,200. SUGAR: Sugar prices hit a fresh 28-year high on tight supplies, traders said. Unrefined sugar reached 26.98 US cents a pound on Thursday the highest point since 1981. Tight global supplies remain a supportive influence in sugar, and should limit the downside, said the Public Ledger commodities review. By Thursday on the New York Board of Trade (NYBOT), the price of unrefined sugar for March rose to 26.76 US cents a pound from 26.27 cents the previous Friday. On LIFFE, Londons futures exchange, the price of a tonne of white sugar for delivery in March climbed to 694.50 pounds from 678.20 pounds. COCOA: Cocoa prices fell on profit-taking having struck the highest levels for 30 years a week earlier amid low output in leading producer Ivory Coast. On December 17 in London, cocoa struck 2,337 pounds a tonne a level last seen in October, 1977. By Thursday on LIFFE, the price of cocoa for delivery in March slipped to 2,242 pounds a tonne from 2,265 pounds the previous Friday. On NYBOT, the March cocoa contract dropped to 3,275 dollars a tonne from 3,359 dollars. COFFEE: Coffee prices retreated. A pre-holiday quietness was felt across the markets, said analysts at Sucden Financial Research Looking to next week, we feel sure there will be year-end activity from the funds causing some volatile market action. By Thursday on LIFFE, Robusta for delivery in March fell to 1,326 dollars a tonne from 1,374 dollars the previous Friday. On the NYBOT, Arabica for March decreased to 142.75 US cents a pound from 146.25 cents. RUBBER: Malaysian rubber prices rose owing to weak stockpiles in major producing countries amid the unusually wet weather, dealers said. The decision by China, the worlds largest rubber consumer, to cut duty on rubber imports added support to prices, they added. On Thursday, the Malaysian Rubber Boards benchmark SMR20 climbed to 278.10 US cents a kilo from 273.45 cents the previous Thursday.