London - Commodity markets swung between losses and gains this week, mirroring the performance of the dollar.

The US currency, which at the start of the week was pushing the euro towards parity, began to fall after the Federal Reserve dropped its pledge to remain “patient” on raising US interest rates.

The dropping of the key word from its policy statement at the end of a two-day meeting was a significant step away from its crisis-based monetary policy since 2008 that resulted eventually in the Fed cutting its main rate to zero. Additionally this week, a cautious Federal Reserve marked down its growth forecast for this year by 0.3 percentage point to 2.3-2.7 percent after noting that US economic growth had “moderated somewhat” since January.

OIL: New York’s main contract fell to $42.05 a barrel on Wednesday, its lowest level since March 2009, with the market under persistent pressure from large supplies of crude and a strong dollar, traders said. But the price rebounded strongly on Friday as traders snapped up the euro after Greece’s deal with its key European partners, who agreed to finish work “as fast as possible” on completing its EU-IMF rescue programme.  Oil markets are tracking also the global supply glut, which was made worse by the 10th straight weekly increase in US crude inventories. “Market sentiment seems to be dominated by inventories this week, with levels across Europe, Asia and the US building steadily over the past week,” said Kash Kamal, senior research analyst at Sucden brokers. Data from the US Department of Energy on Wednesday showed US crude stocks jumped 9.6 million barrels for the week ending March 13, taking inventories to the highest level in at least the last 80 years.

“Traders are still wary of the oversupply situation,” said Ric Spooner, market analyst with CMC Markets in Sydney. Spooner told AFP that the supply glut shows no signs of diminishing after the Kuwaiti oil minister on Thursday said that members of the OPEC cartel have no choice but to maintain current production levels in order to preserve their market share. Kuwait is a key member of the Organization of the Petroleum Exporting Countries that pumps about one-third of the world’s oil.

World crude futures have collapsed by about 60 percent since June, while OPEC’s decision in November to keep production unchanged sent oil prices plunging.

The oil market surged briefly on Wednesday after the US central bank signalled it was in no hurry to raise rates, which sent the dollar tumbling. A weaker US currency makes dollar-priced oil cheaper for holders of rival currencies, fuelling demand. By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in May stood at $54.99 a barrel compared with $55.99 for the expired April contract a week earlier. On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for April rose to $46.17 a barrel from $45.28 a week earlier.

PRECIOUS METALS: Gold recovered after forging its lowest level since December the previous week and as the market tracked developments surrounding the outlook for US interest rates.

“A subdued inflation outlook, a rising dollar and recent weakness in economic data may sway the Fed from going too aggressive on rates,” said Ole Hansen, analyst at Saxo Bank.

By Friday on the London Bullion Market, the price of gold rose to $1,183.10 an ounce from $1,152 a week earlier. Silver rallied to $16.17 an ounce from $15.50. On the London Platinum and Palladium Market, platinum grew to $1,129 an ounce from $1,115. Palladium fell to $778 an ounce from $791.

BASE METALS: Base or industrial metals came under pressure from a rallying dollar, before winning support as the US unit lost some of its gains. By Friday on the London Metal Exchange, copper for delivery in three months rose to $5,945 a tonne from $5,837 a week earlier. Three-month aluminium climbed to $1,784 per tonne from $1,754.50. Three-month lead dropped to $1,752 a tonne from $1,790.50. Three-month tin slid to $17,150 a tonne from $17,425. Three-month nickel retreated to $13,035 a tonne from $13,880. Three-month zinc edged higher to $2,023.50 a tonne from $2,011.50.

- Sugar prices melt -

COCOA: The commodity retreated on slack demand. “There is no real sign that the world economic picture has changed in a way that would push demand higher,” said Jack Scoville, analyst at Price Futures Group.

 By Friday on LIFFE, London’s futures exchange, cocoa for delivery in May slid to £1,911 a tonne from £1,994 a week earlier. On the ICE Futures US exchange, cocoa for May retreated to $2,700 a tonne from $2,839 the previous week.

COFFEE: Prices rose on expectations of lower Brazilian output. “In response to poor moisture levels, the largest Brazilian cooperative had in February abandoned its forecasts of higher production on the part of its members,” Commerzbank said in a note to clients.

“Now other cooperatives actually fear that production will slump by 20 percent or even 50 percent as compared with last year. What is more, insect infestation in increasing numbers of regions is causing a state of emergency to be declared in terms of crop health.” Coffee prices were under pressure also as Brazil’s real currency trades around 12-year lows against the dollar.

By Friday on ICE Futures, Arabica for delivery in May jumped to 142.65 US cents a pound from 132.30 cents a week earlier. On LIFFE, Robusta for May edged up to $1,791 a tonne from $1,771.

SUGAR: New York sugar prices neared six-year lows owing to robust supplies in Brazil, whose struggling currency was also dragging down the market. New York-traded prices hit 12.47 US cents a pound on Friday — the lowest level since April 2009. “We’re coming to the end of the 2014/15 season, the fourth successive year of global production surplus,” noted Czarnikow trading group. By Friday on LIFFE, a tonne of white sugar for delivery in May fell to $361.30 from $369.60 a week earlier. On ICE Futures US, unrefined sugar for May dropped to 12.50 US cents a pound from 13.09 US cents.