LONDON, Aug 10, 2012 (AFP) - Oil and metals prices mostly rose this week as traders reacted to mixed Chinese economic data and positive figures out the United States, while maize and soya futures jumped on drought conditions.
OIL: Crude oil prices hit three-month highs before easing off Friday in the wake of disappointing Chinese trade data and a downgrade to crude demand growth by the International Energy Agency.
"The dip in price was triggered by weaker Chinese import data," said Commerzbank analyst Carsten Fritsch.
Prices had been in strong form up until then, reaching a three-month high Thursday -- at $113.52 a barrel in London -- on buoyant US jobs data, a hike in OPEC's crude demand growth forecast and some positive figures out of China.
New York's main oil contract hit a three-month peak of $94.72 Wednesday, helped by Middle East tensions according to traders.
But prices retreated Friday as official data showed China's exports and imports slowed for the second consecutive month in July, highlighting worsening conditions in the world's second-biggest economy.
The figures -- sharply below market expectations -- add to concerns that China's economy is still losing steam despite government efforts to prop up growth and investment to lessen the impact of the global slowdown.
Analysts said the weak data created further impetus for Beijing to announce more stimulus policies.
"The economic data out of China certainly has been bearish... it's not good news and has prompted equities and oil futures to move down," said Victor Shum of Purvin and Gertz energy consultants in Singapore.
China's exports grew at a marginal one percent in July from a year earlier to $176.9 billion (144 billion euros), the General Administration of Customs said in a statement, down from the 11.3 percent gain seen in June.
Imports rose 4.7 percent year-on-year to $151.8 billion last month, it said, compared with the June increase of 6.3 percent indicating slowing domestic demand.
The trade surplus narrowed to $25.1 billion last month from $31.7 billion in June.
China, the world's biggest exporter, has been hit by weakness in overseas economies including debt-ravaged Europe, a key trading partner, while a sluggish property market and softening consumer spending have also dragged.
Elsewhere Friday, the International Energy Agency said faltering economic growth would undercut global oil demand this year and next.
"Sluggish economic growth could restrict annual oil demand growth to 0.9 million barrels per day in 2012 and 0.8 mbpd in 2013, with demand averaging 89.6 mbpd and 90.5 mbpd," down from last month's estimates of 89.9 mbpd and 90.9 mbpd, respectively, the IEA said in its latest Oil Market Report.
The IEA highlighted slower demand in the United States and China, which together account for a third of the global market, while technical changes in its calculations also cut its 2012 forecast by 0.25 mbpd.
The IEA, set up to advise developed countries on energy policy, reduced its 2013 economic growth forecast to 3.6 percent from 3.8 percent but left its 2012 estimate unchanged at 3.3 percent.
On Thursday, the Organization of Petroleum Exporting Countries increased its global demand forecast marginally, to 88.72 mbpd from 88.68 mbpd in July.
Demand for 2013 was put at 89.52 mbpd, up from 89.50 mbpd last month, representing an increase of 0.81 mbpd from 2012, OPEC said.
Official data Thursday showed US weekly jobless claims fell to 361,000 -- another sign of moderate strength in the biggest economy's employment market despite a second-quarter lull in hiring.
Markets also cheered news that China's inflation rate had fallen to 1.8 percent in July, the lowest since January 2010.
By late Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in September rallied to $111.84 from $108.58 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for September climbed to $92.30 from $91.02.
PRECIOUS METALS: Gold led the complex higher.
"Gold stands to benefit from monetary easing. Higher liquidity, inflation expectations and a depreciating US dollar are all positive factors for the balance of the year," said BNP Paribas analyst Anne-Laure Tremblay.
"Only an unexpected improvement in the economic conditions in the US and the eurozone would put-off central bank intervention and undermine higher prices.
"Downside risk still lies with eurozone, where a contagion of the debt sovereign crisis could drive investors towards the US dollar and treasuries rather than gold," she added.
By late Friday on the London Bullion Market, gold rose to $1,618.50 an ounce from $1,602 a week earlier.
Silver climbed to $27.88 an ounce from $27.25.
On the London Platinum and Palladium Market, platinum edged up to $1,399 an ounce from $1,390.
Palladium grew to $578 an ounce from $573 an ounce.
BASE METALS: Prices mainly rose over the week despite some late profit-taking.
Metals gained from "the weaker inflation data in China," said William Adams, an analyst at data provider Fast Markets.
"Sentiment has been weakened by Chinese data that showed a smaller than expected Chinese trade surplus."
By late Friday on the London Metal Exchange, copper for delivery in three months grew to $7,440 a tonne from $7,384 a week earlier.
Three-month aluminium rose to $1,877 a tonne from $1,854.
Three-month lead gained to $1,898 a tonne from $1,875.
Three-month tin increased to $17,785 a tonne from $17,750.
Three-month nickel fell to $15,305 a tonne from $15,528.
Three-month zinc increased to $1,842 a tonne from $1,827.
GRAINS AND SOYA: Maize and soya prices rose strongly as the United States on Friday slashed production estimates for its globally crucial crops, saying the record heat across the country's farm belt had cut expected output to a six-year low.
The curtailed production will likely send maize and soybean prices to record highs, the Department of Agriculture said.
The US drought has already fed into world food prices. The UN Food and Agriculture Organization's global food price index jumped six percent in July after declining for three months, the FAO said Thursday.
On Friday, FAO chief Jose Graziano da Silva urged the United States to stop turning maize and other crops into biofuels like ethanol to mitigate the sharp rise in food prices.
"The US drought leaves global markets highly vulnerable to any further supply side shocks," da Silva wrote in the Financial Times.
By Friday on the Chicago Board of Trade, maize for delivery in December jumped to $8.18 a bushel from $8.07 a week earlier.
November-dated soyabean meal -- used in animal feed -- rallied to $16.53 a bushel from $16.28.
Wheat for December dipped to $8.99 from $9.03.
COCOA: Prices struck 10-month highs on tight supply concerns.
"Cocoa prices climbed... amid fears that the dry weather in West Africa, the world's largest growing region, could seriously curb the main harvest which begins in October," said Commerzbank analyst Fritsch.
Prices hit 1,674 a tonne in London and $2,479 a tonne in New York -- the highest levels since November 2011.
By Friday on LIFFE, London's futures exchange, cocoa for delivery in December stood at 1,674 a tonne compared with 1,647 for the September contract a week earlier.
In New York on the NYBOT-ICE, cocoa for September jumped to $2,479 a tonne from $2,372.
COFFEE: Coffee prices extended losses owing to solid Brazilian supplies.
"Stocks continue to increase on a daily basis and there is certainly Arabica coffee available," said analysts at Sucden brokers.
"Traders are still concerned what and how much Robusta will be available going forward," they added.
By Friday on NYBOT-ICE, Arabica for delivery in September dropped to 166.55 US cents a pound from 172.50 cents a week earlier.
On LIFFE, Robusta for September slid to $2,175 a tonne from $2,230.
SUGAR: Sugar futures fell further on a strong Brazilian supply situation.
"The market is almost 12.5 percent lower than only three weeks ago and all the signs are that this weakness will continue," said Sucden analyst Nick Penney.
By Friday on LIFFE, the price of a tonne of white sugar for delivery in October slid at $586.50 from $607.80 a week earlier.
On NYBOT-ICE, the price of unrefined sugar for October dropped to 21.04 US cents a pound from 21.97 cents the previous week.
RUBBER: Prices eased on concerns over improved rubber production coupled with a downward revision of projected consumption driven by weak manufacturing data from China.
By Friday, the Malaysian Rubber Board's benchmark SMR20 slipped to 261.75 US cents a kilo from 274.45 cents the previous week.
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