Weekly commodities round-up

It was a choppy week for the commodities sector, with gold, silver and copper, as well as crude oil, experiencing sharp declines early on, before springing back with fresh vigour at the end of the week.

After their recent steady gains, copper prices underwent a rapid drop at the start of the week, tumbling to $6,553 a tonne by last Tuesday, as weaker buying in Shanghai shook confidence in demand levels. Gold and silver also tumbled on ongoing US banking losses which threatened the global recovery, with the former sliding to as low as $1,033 an ounce mid-week.

However, as the US dollar started to weaken towards the end of the weak, commodity prices dusted themselves off and started their upward ascent once again. Copper rose to $6,645 a tonne, close to breaking new high levels, while gold climbed back to levels of $1,052 an ounce and silver was holding tight at $16.58 an ounce.

Analyst John Meyer of Fairfax said mining companies are the one to keep an eye on as the new week gets underway: "Miners will benefit from positive copper and gold price moves as US dollar weakens and funds move into safe haven assets as CIT Group files for bankruptcy."

Mining movers

Smaller mining companies Ormonde Mining (ORM) and Ariana Resources (AAU) stormed ahead as their new ventures with larger partners gathered pace. Junior exploration company Ormonde Mining revealed Antofagasta (ANTO) Minerals as the company's joint venture partner covering Ormonde's La Zarza ground holdings in Spain, after keeping the name under wraps for four months.

Antofagasta will embark on extending the previous exploration by Ormonde to span the entire 3km long La Zarza sulphide deposit in the Huelva Province.

Fellow mining company Ariana Resources released details of its own joint venture agreement with Turkish construction firm Proccea Construction. The venture will cover the Sindirgi and Tavsan projects with Proccea stumping up $8 million for its involvement.

However, flying the flag for heavyweight miners was Kazakhmys (KAZ), who said it's on target to hit its full-year copper production output, despite fourth-quarter levels set to be marred by maintenance work. The company also enjoyed positive results across its other operations. Gold production rose 13% to 104 kilo ounces, compared to the first nine months of 2008, while silver production climbed 9% to 13,196 kilo ounces.

Getting oily

Oil prices embarked on a roller-coaster ride during the past seven days, falling from a one-year high of $82 a barrel the week before to as low as $77 a barrel during the first half of the week.

Prices weren't the only ones feeling the pressure, as three oil and gas majors stepped into the spotlight to report their quarterly results.

First up was BP (BP-), who felt the pinch of sharply lower oil prices this year as its third-quarter profits tumbled by more than half, but still managed to beat analysts' predictions. Rising costs and falling sales sent replacement cost profit -used as a performance indicator for gas and oil groups - down to $4.98 billion from $10 billion in the same period of last year, but ahead of analysts' forecasts of $3.2 billion.

The oil giant also hit the headlines at the end of the week after being hit with a record fine of over $87 million for failing to rectify safety hazards at its Texas City refinery in the US.

BG Group (BG-) followed hot on BP's heels, posting a 44% drop in third-quarter net profits, despite higher production levels, a firmer dollar and stronger liquefied natural gas sales. Net income tumbled from £857 million a year ago to £484 million this year.

Finally, the spotlight fell on oil behemoth Shell (RDSB), who fared the worst. The Anglo-Dutch company's third-quarter profits plummeted by 72% amid weaker oil and gas prices. Profits fell to $3 billion between July and September from $10 billion during the same period of the last year - significantly below analysts' predictions of a 60$ drop in earnings.

It was not bleak news all round, however, as Aurelian Oil & Gas (AUL) announced that its 90%-owned subsidiary, Energia Zachod struck a gas supply deal with Kulczyk Investments and Nostra Terra Oil and Gas (NTOG) ended the week on a high note following an oil discovery in the Boxberger Well in Kansas.

The news led the oil and gas exploration company to become AIM's highest flyer on Friday morning, after its share price soared by 30%.