LONDON: Oil prices endured a roller-coaster week, with an upbeat economic growth forecast for the world economy giving way to concerns over Chinese output.
Commodity markets traders balanced the IMF's global growth forecast upgrades against news that manufacturing activity in key commodity consumer China shrank in January for the first time in six months.
"Business surveys suggest that the eurozone recovery gained momentum in January, while China's manufacturing slowdown has continued," noted analysts at consultancy Capital Economics.
OIL: New York prices on Thursday jumped to $97.84 a barrel, the highest level since January 2, helped in part by a sliding dollar that can make commodities priced in the US unit cheaper for buyers holding rival currencies.
Crude futures though dropped on Friday, mirroring sentiment across equity markets, with traders banking recent profits amid strains across emerging markets including China and Turkey, analysts said.
"The strong rebound of the WTI oil contract has been a result of the weaker US dollar that provided strong support to the market," said analyst Myrto Sokou at Sucden brokers.
The oil market won support this week also on upgrades to economic growth forecasts from the International Monetary Fund, and crude demand growth predictions from the International Energy Agency.
The IMF lifted its estimate for world economic growth on Tuesday by 0.1 percentage point to 3.7 percent for 2014, hiking its global forecast for the first time in two years.
The optimistic outlook was fuelled by solid growth in the United States as other countries also move away from austerity budgets.
In a further boost, the International Energy Agency (IEA) also hiked its prediction of global oil demand, which is dependent on the strength of the world economy.
And on Thursday, the dollar sank against the euro as Markit Economics said its Eurozone Composite Purchasing Managers Index (PMI) for January rose to 53.2 points from 52.1 in December.
That was the seventh monthly increase running and the fastest rate of growth since June 2011. A number above 50 denotes expansion.
The US government's Energy Information Administration meanwhile revealed that American oil reserves rose last week in line with market expectations.
By Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in March rose to $107.24 a barrel from $106.73 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for March stood at $96.64 a barrel compared with $94.29 for the expired February contract a week earlier.
Metals mixed on weaker dollar, Chinese figures:
PRECIOUS METALS: Gold prices rebounded, winning strength from the flagging dollar and haven demand amid losses on Wall Street.
"A rare combination of plunging stocks and US dollar has seen precious metals rally," said Forex.com analyst Fawad Razaqzada.
"The greenback has retreated viciously on the back of mostly disappointing US data and some cheerful manufacturing PMIs out of Europe which have given the euro a shot in the arm."
The US stock market fell heavily on Thursday after the poor Chinese data, sending investors fleeing for gold, which is regarded as a haven.
By late Friday on the London Bullion Market, the price of gold rose to $1,267 an ounce from $1,250 a week earlier.
Silver rose to $20.19 an ounce from $20.01.
On the London Platinum and Palladium Market, platinum dipped to $1,443 an ounce from $1,250 a week earlier.
Palladium slipped to $745 an ounce from $747.
BASE METALS: Base or industrial metals prices dropped following the disappointing Chinese data.
HSBC's China manufacturing sector purchasing managers index fell to 49.6, below the line between growth and contraction, raising concerns that the world's second largest economy is still trying to find its footing.
The index is a closely watched gauge of the health of the Asian economic powerhouse. A reading above 50 indicates growth, while anything below signals contraction.
"The catalyst for softer metal prices across the board seems to have been a weaker than forecast HSBC Chinese manufacturing PMI reading," said analysts at broker Triland Metals.
The last time the figure for China dropped below the critical point was in July, when it stood at 47.7.
By Friday on the London Metal Exchange, copper for delivery in three months slid to $7,210.50 a tonne from $7,302.25 week earlier.
Three-month aluminium fell to $1,768 a tonne from $1,808.
Three-month lead retreated to $2,152 a tonne from $2,191.
Three-month tin dropped to $22,000 a tonne from $22,301.
Three-month nickel dipped to $14,553 a tonne from $14,560.
Three-month zinc declined to $2,027 a tonne from $2,066.
Sugar futures hit new depths:
SUGAR: The sugar market plummeted to multi-year low points on abundant supplies. Prices reached 14.97 US cents a pound in New York, the lowest level since June 2010. In London deals, sugar futures hit the weakest point since April 2009, at $403.40 a tonne.
"Prices have slumped in response to a record harvest in Brazil the world's largest exporter and strong selling activity prompted by the weakening real", or currency of Brazil, said analysts at Ecobank.
"Going forward, expectations of a fourth consecutive global (season) surplus coupled with ample stocks in India and China, will continue to weigh on prices," they added.
By Friday on LIFFE, the price of a tonne of white sugar for March slid to $404.90 from $418.10 a week earlier.
On New York's ICE Futures US exchange, the price of unrefined sugar for delivery in March dropped to 15.05 US cents a pound from 15.49.
COFFEE: Coffee futures retreated on solid supplies in Brazil, the world's biggest exporter of the commodity.
By Friday on the ICE Futures US exchange, Arabica for delivery in March slipped to 114.50 US cents a pound from 117.95 cents a week earlier.
On LIFFE, Robusta for March fell to $1,700 a tonne from $1,725.
COCOA: Prices advanced.
"Prices have been supported by a rebound in demand from global grinders, notably in Western Europe and Asia, and strong buying by traders who fear that a sharp slowdown in West African deliveries is on the cards," said Ecobank analysts.
"As a result, prices will remain range-bound until there is more clarity on the health of the upcoming West African mid-crop."
By Friday on LIFFE, London's futures exchange, cocoa for delivery in March grew to £1,778 a tonne from £1,756 a week earlier.
On ICE Futures US, cocoa for March increased to $2,806 a tonne from $2,740.
RUBBER: Prices dropped on a lack of buyers in international markets, traders said.
The Malaysian Rubber Board's benchmark SMR20 fell to 213.70 US cents a kilo from 219.50 cents in the previous holiday-shortened week.-Reuters
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