Crude oil crosses Rs 2,200-mark, copper jumps 10%

Written by Commodities Bureau | Mumbai | Updated: Jan 6 2009, 05:05am hrs
Crude oil futures on the national commodity exchanges rose sharply and crossed Rs 2200-mark on the week ended on Friday as the conflict in Gaza strip increased concern that Middle East oil supplies would be cut. Yellow metal remained firm last week on some buying support. Copper futures prices supported by news two key Chinese domestic smelters - Jiangxi Copper and Yunnan Copper - will lose production due to equipment malfunctions.

MCX crude oil January 2009 contracts ended higher at Rs 2,224 per barrel on Friday over previous week's close of Rs 1,847 per barrel, up by Rs 377 or 20% over the previous week. Energy products futures prices in the overseas markets rose last week in response to the rising tensions in the Middle East and a dispute between Russia and Ukraine over natural gas supplies.

The Organization of the Petroleum Exporting Countries (Opec) has announced production cuts totaling more than 4 million barrels per day in the last few months. "Ongoing violence in Gaza also sent prices higher," a local dealer said.

NYMEX February crude oil futures ended the week 22.88% higher than the previous week to close at $46.34 per barrel, highest closing level since December 11, 2008.

MCX Gold February 2009 contracts closed higher at Rs 13,559 per 10 gram on Friday over previous week's Rs 13,392 per 10 gram, up by Rs 167 or 1.2%. The benchmark February contract eased after gaining around 1% in the past two trading sessions as weaker crude oil dimmed the yellow metal's appeal as a hedge against inflation.

"A global recession may damp demand for the precious metal. Gold imports in the country fell for a second straight month in December. Imports fell to about 3 tonne from 16 tonne a year earlier, according to the Bombay Bullion Association Ltd.

MCX Silver March 2009 contracts were traded higher at Rs 18,599 per kg on Friday from Rs 17,416 over the previous week.

"A weaker dollar and expectations of grimmer US economic data could still ignite safe-haven buying from investors," an analyst said.

MCX Copper February 2009 contracts were higher by 10% to settle at Rs 158.40 per kg on Friday from Rs 144.10 over the previous week. Copper futures supported by news two key Chinese domestic smelters - Jiangxi Copper and Yunnan Copper - will lose production due to equipment malfunctions.

"Additional upside momentum in the red metal is expected from stronger tone in energy markets," analysts said.

Last week, copper futures prices opened the week at Rs 144.80 initially made a low of Rs 142.75 then moved sharply higher breaking all the resistances but finally found good resistance at Rs 160.90 levels.

Later prices corrected towards Rs 158.0 and finally ended the week with a huge gain of Rs.14.75 to close at Rs 158.95. LME Copper rose to $3,120 a tonne on Friday from $3,070 a tonne at the close on Wednesday on short-term technical buying.