Oil price hovers at $70 amid pipeline attacks

Oil was little changed on the week as a vacillating market continued to muse on the durability of a rally that has seen crude prices double since February.

Further rebel attacks on pipelines in Nigeria, which threaten to disrupt supplies from Africa's largest exporter of crude, provided a focal point in a relatively thin week for market-moving economic data.

The Nigerian news divided analysts, with some playing down its price sensitivity, while others, such as Olivier Jakob of Petromatrix, an oil consultancy, warned that the market was still not pricing in the fundamental impact of the events in Nigeria. Commerzbank's analysts, however, said they saw oil hovering around $70 for the rest of the year.

"We do not envisage prices moving significantly beyond this level, as we believe the Saudis would increase production from their ample spare capacity so that a $70 price is maintained," they said.

Nymex August West Texas Intermediate fell 1.1 per cent over the week to $69.16 a barrel], while ICE August Brent fell 0.39 per cent to $68.92 ].

Other commodities markets were mixed.

Sugar prices yesterday hit a three-year high after a poor start for India's monsoon season triggered worries that the world's largest producer and consumer of the sweetener could face another disappointing crop, exacerbating the global sugar deficit.

ICE July raw sugar surged to 16.69 cents per pound, the highest level since July 2006, while the October contract, which will become the market's benchmark next week, traded well above 17.50 cents per pound. Sugar posted a weekly gain above 9 per cent after July prices yesterday pared gains to 16.46 cents amid some profit taking.

Traders remain convinced that sugar will rise further in the second half of the year.

Base metals bounced around in range-bound trade, with copper recovering from concerns over Chinese demand earlier in the week to end up 1.8 per cent to $5,050 a tonne. Gold prices were 0.6 on the week to $939 a troy ounce. link...