Nov. 7 (Bloomberg) -- Natural rubber futures in Tokyo, the global benchmark, climbed to the highest in 16 months as crude oil reached a record, raising investor demand for commodities as a hedge against inflation.

Crude oil rose above $98 a barrel as a storm forced BP Plc and ConocoPhillips to evacuate workers and cut production in the North Sea. Natural rubber futures often move in the same direction as crude oil because rising oil prices add to production costs of competing synthetic rubber.

``Rubber futures were bought as oil prices are climbing toward $100,'' Jun Nishimuta, an analyst at Kanetsu Asset Management Co. in Tokyo, said by phone today. ``Investors are putting money into commodities for higher returns,'' he added.

Rubber for April delivery rose as much as 7.9 yen, or 2.6 percent, to 312.2 yen per kilogram ($2,741 a metric ton) on the Tokyo Commodity Exchange, the highest for the most-active contract since July 3, 2006. It closed at 310.8 yen.

Rubber futures were also bought amid speculation demand from China, the world's largest user of the commodity, will increase as rubber output in the country is slow, Nishimuta said.

``Chinese rubber imports will probably pick up as rubber production in China seasonally declines toward the end of the year,'' Nishimuta said.

China imported 1.2 million tons of natural rubber in the first nine months of this year, up 0.2 percent from a year earlier, according to the Beijing-based customs office.

In the cash market, Thai shippers were offering RSS-3 grade rubber for December shipment at $2.6 a kilogram today, up from $2.55 Nov. 2, Nishimuta said. Prices gained as output in Thailand, the world's largest producer and exporter of the commodity, declined because of wet weather and reduced yield from old rubber trees.

Natural rubber futures for January delivery on the Shanghai Futures Exchange added 145 yuan, or 0.6 percent, to close at 22,845 yuan ($3,068) a ton.

To contact the reporter on this story: Aya Takada in Tokyo at atakada2@bloomberg.net

Last Updated: November 7, 2007 02:59 EST