OIL SETS RECORD HIGH 147 DOLLARS

Oil prices surged to a record 147.50 dollars during the week ended July 11 and aluminium hit all time highs as many commodities were boosted by supply worries, growing tensions over Iran and the weak US currency.

OIL: Oil prices rose above 147 dollars on July 11 as traders seized on tensions over Iran and Nigeria at the end of a very volatile trading week.

London?s Brent North Sea oil jumped to as high as 147.50 dollars per barrel to beat the previous record of 146.69 dollars set on July 3. New York crude also topped 147 dollars for the first time to reach a historic 147.27 dollars.

?Prices soared to record highs on mounting geopolitical tensions in Nigeria and Iran, while supply threats in Brazil add to supply woes,? said Barclays Capital analysts.

Prices also swept back into record territory on July 11 after the European single currency briefly leapt above 1.59 dollars. Oil rallied by almost six dollars on July 10 on the back of simmering geopolitical tensions over key producer Iran and worries over stretched global crude supplies, traders said. Prices had dived below 140 dollars on July 7 as a result of a then strengthening US currency, underlining the extreme volatility that the market is currently experiencing.

On July 12, traders continued to track Iran, which is OPEC?s second-biggest crude oil producer with output of about 4.0 million barrels per day.

The White House played down the risk of war between Iran and the US, despite Iranian missile tests and some tough talk by US Secretary of State Condoleezza Rice.

Rice warned Iran that Washington had beefed up its security presence in the Gulf and would not hesitate to defend its ally Israel.

Iran insists its nuclear drive is aimed solely at generating energy but some Western nations fear it could be aimed at making an atomic bomb and have called for a freeze of uranium enrichment. OPEC would not be able to replace Iran?s oil production if supplies were halted in case of a war with Israel or the US, the oil cartel?s chief has said.

At the same time, the oil producers? cartel has cut its estimate for world crude demand over the next two decades, predicting that high prices would compel consumer countries to be more efficient in their use of energy.

The International Energy Agency has meanwhile forecast that tension on oil markets was set to ease early next year amid an economic slowdown in the US Violence in the southern delta region has already reduced Nigeria?s total oil production by a quarter since January 2006. By July 11, Brent North Sea crude for August had eased back to 144.15 dollars, leaving it down slightly from 144.86 dollars a week earlier. New York?s main oil futures contract, light sweet crude for August rose to 146.55 dollars from 144.10 dollars.

PRECIOUS METALS: Gold rallied on the back of growing inflationary pressures, record high oil prices and turmoil on global equity markets.

On the London Bullion Market, gold advanced to 962.75 dollars per ounce on July 11 from 931.25 dollars a week earlier. Silver rose to 18.38 dollars per ounce from 18.01 dollars. On the London Platinum and Palladium Market, platinum firmed to 2,030 dollars per ounce on July 11 from 2,012 dollars a week earlier. Palladium eased to 454 dollars per ounce from 456 dollars.

BASE METALS: Aluminum hit a record while copper beat a retreat from its all-time high hit the previous week. Aluminium hit a historic 3,380 dollars per tonne on July 10 after Chinese moves to cut production. ?Aluminium has hit a record high ... following an announcement that China?s top 20 aluminium smelters are to cut production by 5-10 percent from this month,? Barclays Capital analysts said.

By July 11, copper for delivery in three months fell to 8,365 dollars per tonne on the London Metal Exchange from 8,640 dollars a week earlier.

Three-month aluminium jumped to 3,380 dollars per tonne from 3,100 dollars. Three-month lead rose to 2,025 dollars per tonne from 1,555 dollars. Three-month zinc gained to 2,050 dollars per tonne from 1,757 dollars. Three-month tin climbed to 23,201 dollars per tonne from 22,475 dollars. Three-month nickel advanced to 21,900 dollars per tonne from 20,275 dollars.

COCOA: Cocoa prices fell on account of profit taking after reaching multi-year highs the previous week on concerns over tight supplies in exporter Ivory Coast By July 11 on LIFFE, London?s futures exchange, the price of cocoa for September delivery had dropped to 1,550 pounds per tonne from 1,609 pounds a week earlier. On the New York Board of Trade (NYBOT), the September cocoa contract fell to 2,926 dollars per tonne from 3,136 dollars.

COFFEE: Coffee prices weakened on the prospect of abundant supplies in Brazil, the major producer. By July 11 on LIFFE, Robusta for September delivery fell to 2,361 dollars per tonne from 2,480 dollars a week earlier. On the NYBOT, Arabica for September delivery declined to 142.62 US cents per pound from 151.90 cents. SUGAR: Sugar prices drifted lower in quiet trading conditions. By July 11 on LIFFE, the price per tonne of white sugar for October delivery dipped to 390.50 pounds from 393 pounds the previous week. On NYBOT, the price of unrefined sugar for October delivery declined to 13.80 US cents per pound from 13.91 cents.

RUBBER: Malaysian rubber prices eased despite robust demand from China. On July 11, the Malaysian Rubber Board?s benchmark SMR20 declined to 322.40 US cents per kg (2.2 pounds) from 324.80 a week ago.

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