LONDON, 20 June 2004 — Oil prices rebounded this week, lifted by sabotage attacks on key pipelines in Iraq that halted the country’s exports and reignited concerns over supply.

Precious metals also rallied as speculative funds rushed to invest in the so-called “safe-havens” in the wake of bloody violence in Iraq as the troubled country prepares to regain its sovereignty on June 30.

Coffee prices fell sharply as frost failed to materialize in leading producer Brazil. The Commodities Research Bureau’s index of 17 commodities rose to 270.09 points on Friday from 269.93 a week earlier.

Gold: Gold prices surged, helped by heavy buying from speculative funds toward the end of the week. “Violence in the Middle East seemed to be the biggest influence over the gold market,” said analyst James Moore at the TheBullionDesk.com website. “Middle East tension will continue to encourage safe-haven buying.

“Gold should continue to trade in a range between $380 and $390 for the moment but will fall heavily ahead of the Fed’s rate decision at the end of the month,” he added.

The US Federal Reserve was expected to hike interest rates by a quarter point to 1.25 percent on June 30. By Friday gold prices rose to $395.10 per ounce on the London Bullion Market from $384.85 a week earlier.

Silver: Silver prices also benefited from speculative-fund buying and violence in Iraq, where 41 people were killed and 145 injured in twin car bomb attacks on Thursday. “Silver continued to trade largely in line with gold,” Moore said. Silver prices climbed to $5.950 per ounce on Friday from $5.690 a week earlier.

Platinum and Palladium: Platinum and palladium prices overcame pressure caused by an absence of buying from China to finish the week on a high note. “Platinum continues to trade quietly near the recent lows and palladium has barely recovered any ground from its recent plunge,” UBS analyst John Read said.

By Friday, platinum prices lifted to $807 per ounce on the London Platinum and Palladium Market from $795 a week earlier. Palladium prices dollars stood at $229 per ounce from $218.

Base Metals: Base metal prices rebounded, led by nickel, as worries about a slowdown in the Chinese economy receded, analysts said. Base metals “have recovered quite impressively. Nickel is the one that stands out”, Societe Generale analyst Stephen Briggs said. “The fundamentals are good, the China story is not so bad after all, the market has been unduly worried about China,” he added.

Base metal prices have slumped in recent weeks as China took measures to cool its economy, which has heated in part because of a voracious appetite for raw materials.

By Friday, three-month copper prices climbed to $2,602 per ton on the London Metal Exchange from $2,540.50 a week earlier. Three-month aluminum prices rose to $1,704.50 per ton from $1,637. Three-month nickel prices surged to $14,710 per ton from $12,550. Three-month lead prices advanced to $847 per ton from $764. Three-month tin prices stood at $8,930 per ton from $8,775. Three-month zinc prices traded at $1,029.50 per ton from $1,043.

Oil: Oil prices rallied this week, lifted by violence in major producers Iraq and Saudi Arabia and a strike by oil workers in Norway — the world’s third biggest exporter of crude.

Deadly bomb blasts in Iraq on Thursday came 24 hours after the security chief for Iraq’s northern oil fields, Ghazi Talabani, was assassinated.

Meanwhile, oil exports from southern Iraq were blocked after sabotage attacks on pipelines near the port of Basra earlier in the week. The exports were expected to resume today, a coalition official in southern Iraq told AFP on Friday.

The southern oil fields had produced 1.6-1.8 million barrels per day before the sabotage around Basra, 500 kilometers south of Baghdad. Iraq’s southern terminals have been the main gateway for oil exports since last year, when insurgents launched a relentless campaign of sabotage against the northern city of Kirkuk’s pipeline to a Mediterranean terminal in Turkey.

Meanwhile, the start of an indefinite strike by some 200 Norwegian oil workers Friday also helped to lift prices. The climb in prices came as the Organization of Petroleum Exporting Countries said it would call on non-member producers to increase output.

OPEC has pledged to increase its output ceiling by 2.5 million barrels per day by Aug. 1 in a bid to push down prices which at current levels are seen as a threat to the global economic recovery by aggravating inflation.

By Friday, the price of benchmark Brent North Sea crude oil for July delivery rose to $35.95 per barrel in late London trading from $35.60 a week earlier.

In New York, the reference light sweet crude July contract stood at $38.45 on Friday, unchanged from Thursday of the previous week, when it had shut a day early for the state funeral of former US President Ronald Reagan.

Rubber: Rubber prices climbed this week, boosted by buying from investment funds, dealers said. “It has been a dull market which finished on a high note on Friday,” one London trader said. In Osaka, the RSS 3 July contract rose to 158 cents on Friday against 152.20 cents a week earlier. Singapore’s RSS 3 contract for July stood at 138.25 cents against 136.75 cents.

Cocoa: Cocoa prices stabilized as violence in leading producer Ivory Coast eased. “Violence in Ivory Coast has subsided but it is expected to continue on a sporadic basis,” Refco analyst Ann Prendergast said. Ivory Coast’s main city of Abidjan had witnessed a wave of anti-French violence during the previous week.

Coffee: Coffee prices fell sharply as warmer weather in leading producer Brazil ended worries about an arrival of frost that would have damaged crops. “Coffee futures washed out ... after frost failed to materialize in Brazil and warm weather entered the area,” Prendergast said. Prices in New York recently reached their highest level for almost four years on frost fears.

Cotton: Cotton prices fell, weighed down as a result of selling by speculative funds, as the market anticipated a bumper US crop. “Futures plunged as speculative selling continued to weigh on the market,” Prendergast said.

New York’s July contract dropped to 52 cents per pound on Friday from 58.15 cents on Thursday of the previous week. The Cotton Outlook Index of physical cotton, the average of the world’s lowest prices, stood at 63 cents on Thursday from 66 cents a week earlier.