LONDON: World oil prices surged this week, in line with a host of other commodities, as sentiment was boosted by hopes of a swift resolution to the long-running sovereign debt crisis in the eurozone.
"The oil markets gained ground this week partly due to renewed hope for the European economy, while a fair share of supply side noise also helped buoy prices," said Barclays Capital analyst Sudakshina Unnikrishnan.
Traders remain on edge over the eurozone debt drama, amid concern that it could spark another sharp economic downturn and slash global demand for energy and other major raw materials.
Markets were also boosted by Slovakia's backing of a beefed-up eurozone bailout fund.
At first, Slovakia's lawmakers rejected a revamp of the eurozone's European Financial Stability Facility (EFSF) rescue fund in a crunch vote late on Tuesday that also toppled the country's centre-right government.
However, Slovak politicians finally agreed on Wednesday to back an increase in the eurozone's EFSF bailout fund to 440 billion euros ($600 billion), which has now been fully ratified and approved by all 17 member nations.
OIL: Brent oil spiked Friday to a three-week peak at $114.78, lifted by a weaker dollar, rising equities and hopes that the weekend G20 finance gathering will make progress towards resolving the eurozone debt drama.
Commentators hope that G20 finance ministers, meeting in Paris, will inspire leaders at the upcoming EU summit on October 23 to fix the region's crisis once and for all.
"Oil prices have rebounded on the firmer tone in equity markets, boosted by the perception of progress in Europe and firmer US economic data," said CMC Markets analyst Michael Hewson.
The European single currency meanwhile leapt as high as $1.3894. A weaker US currency makes dollar-priced oil cheaper for buyers using stronger currencies, thereby stimulating demand and prices.
The crude market had soared on Monday after German Chancellor Angela Merkel and French President Nicolas Sarkozy agreed to deliver a comprehensive solution within weeks.
European Commission president Jose Manuel Barroso meanwhile urged European banks to be "urgently" recapitalised amid concern over their exposure to peripheral eurozone members.
Oil prices then slid Wednesday, after a five-day run-up, as traders eyed demand forecast downgrades from both the International Energy Agency and the OPEC oil cartel.
The market diverged Thursday as traders fretted about slowing demand in China, the world's biggest energy consumer, after official data showed that its trade surplus narrowed for a second straight month.
By late Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in November had rallied to $114.18 a barrel from $105.86 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for November, jumped to $86.51 from $82.82.
PRECIOUS METALS: Prices mostly rose in value.
"The eurozone ... appears to be inching closer to addressing the sovereign debt crisis," noted Credit Agricole CIB analyst Robin Bhar.
By late Friday on the London Bullion Market, gold rose to $1,678 an ounce from $1,652 the previous week.
Silver eased to $31.82 an ounce from $31.98.
On the London Platinum and Palladium Market, platinum increased to $1,553 an ounce from $1,529.
Palladium advanced to $614 an ounce from $609.
BASE METALS: Industrial metals enjoyed mixed fortunes on disappointing economic data from key consumer China.
China's politically sensitive trade surplus fell to $14.51 billion in September as exports slowed sharply, hit by economic turmoil in the United States and Europe, official data showed.
China added Friday that its inflation rate dipped slightly in September, but analysts said it was unlikely to ease tight credit policies on fears surging prices may cause social unrest.
The 6.1 percent year-on-year rise in the consumer price index (CPI) for September marks only a marginal slowdown from 6.2 percent in August.
By late Friday on the LME, copper for delivery in three months rebounded to $7,511 a tonne from $7,348 the previous week.
Three-month aluminium eased to $2,216 a tonne from $2,230.
Three-month lead rose to $2,026 a tonne from $1,963.
Three-month tin decreased to $21,950 a tonne from $22,925.
Three-month zinc leapt to $1,921 a tonne from $1,897.
Three-month nickel dipped to $18,851 a tonne from $19,030.
SUGAR: Prices reaped bumper gains.
"The main contributory factor was the generally positive sentiment in the commodity markets," noted Commerzbank analyst Carsten Fritsch.
By Friday on NYBOT-ICE, the price of unrefined sugar for delivery in March leapt to 26.91 US cents a pound compared with 24.08 cents a week earlier.
On LIFFE, the price of a tonne of white sugar for December rose to £692.30 from £641.70 the previous week.
GRAINS AND SOYA: Prices also climbed on positive investor sentiment over the eurozone crisis.
"You see a lot more confidence on the funds this week because you have seen the stock market rally on the back on optimism that the Europeans will figure something with the debt" crisis, said US Commodities analyst Dax Wedemeyer.
He added: "That's giving the funds confidence to buy commodities this week and they have been big buyers -- that's the biggest reason what we've seen support for the grains this week."
By Friday on the Chicago Board of Trade, maize for delivery in December jumped to $6.42 a bushel from $6.00 a week earlier.
Wheat for December grew to $6.20 from $6.07.
November-dated soyabean meal -- used in animal feed -- advanced to $12.71 a bushel from $11.58.
COCOA: Prices staged a light retreat.
By Friday on LIFFE, London's futures exchange, cocoa for delivery in December eased to £1,707 a tonne from £1,735 the previous week.
In New York on the NYBOT-ICE, cocoa for December dipped to $2,655 a tonne from $2,676.
COFFEE: Coffee futures turned mixed in subdued trade.
By Friday on NYBOT-ICE, Arabica for delivery in December rose to 240.95 US cents a pound from 234.40 US cents the previous week.
On LIFFE, Robusta for November dipped to $1,995 a tonne from $2,025 a tonne.
RUBBER: Rubber prices inched higher as bad weather sparked supply shortages in major producing countries, such as Thailand.
The Malaysian Rubber Board's benchmark SMR20 rose to 420.80 US cents a kilo from 420.30 the previous week.
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