U.S. Commodities: Oil Has Biggest Weekly Rally in Two Years

Crude oil rose, capping the biggest weekly gain in two years, on concern that the turmoil in Libya will spread to Middle East petroleum producers. Grains jumped, driving a measure of raw materials up to a record.

Yesterday, oil surged to a 29-month high amid estimates that Libya’s crude output was cut by as much as two-thirds. The price dropped below $100 a barrel after Saudi Arabia, the U.S. and the International Energy Agency said they can compensate for any Libyan supply disruption. Today, a report showed the U.S. economy expanded less than forecast in the fourth quarter.

“We may move a lot higher on concern over how the Libyan situation will develop over the weekend,” said Phil Flynn, a vice president of research at PFGBest in Chicago. “The reassurances from Saudi Arabia, the IEA and even the White House helped calm fears yesterday, but that might not be enough.”

In other markets, corn and soybeans surged the most in six weeks and wheat had the biggest gain since early December on bets that increasing export demand for U.S. crops will tighten global supplies. Rice also climbed. The UBS Bloomberg Constant Maturity Commodity Index gained 1.9 percent, the most since Dec. 1, to 1,748.7. Earlier, the gauge reached a record 1,751.77.

Oil futures for April delivery climbed 60 cents, or 0.6 percent, to $97.88 on the New York Mercantile Exchange. Yesterday, the commodity reached $103.41, the highest intraday price since Sept. 29, 2008.

This week, oil jumped 14 percent, the most since late February 2009. The price has climbed 25 percent in the past 12 months.

Corn, Soybeans

Corn futures for May delivery jumped 25.5 cents, or 3.7 percent, to close at $7.22 a bushel on the Chicago Board of Trade, the biggest gain since Jan. 12. Earlier, the most-active contract surged by the exchange limit of 30 cents.

Soybean futures for May delivery rose 45.75 cents, or 3.4 percent, to $13.75 a bushel, the largest gain since Jan. 12. Earlier, the price jumped by the limit of 70 cents.

Wheat futures for May delivery climbed 28.75 cents, or 3.7 percent, to $8.1125 a bushel, the biggest advance since Dec. 3.

U.S. exporters reported the biggest week of corn sales since the marketing year began Sept. 1, and wheat sales in the week ended Feb. 17 were 67 percent higher than the prior four- week average, the U.S. Department of Agriculture said today. Shippers sold 165,000 metric tons of soybeans to China for delivery after Sept. 1, the agency reported.

“Export sales were strong for corn and wheat last week, and China buying more soybeans overnight is a positive indication of increasing demand,” said Mark Schultz, the chief analyst for Northstar Commodity Investment Co. in Minneapolis. “Domestic livestock and ethanol producers also increased purchases.”

Rice

Rice, the staple food for half the world, rose the most allowed by the CBOT as countries boosted inventories to cap food inflation that contributed to protests across North Africa and the Middle East.

Bangladesh, South Asia’s biggest buyer, said it’s seeking supplies from India as part of more regular grain purchases to bolster food security.

“When we go for international tenders and prices suddenly rise, private suppliers sometimes fail to fulfill their commitments,” Muhammad Abdur Razzaque, the Bangladeshi food minister, said yesterday. “They don’t supply us and put us in trouble. It has happened.”

Rice futures for May delivery rose by the exchange limit of 50 cents, or 3.6 percent, to $14.31 per 100 pounds, ending a four-session slid.

Commodities settled as follows:

Precious metals: April gold down $6.50 to $1,409.30 an ounce May silver down 25.7 cents to $32.923 an ounce April platinum up $16.60 to $1,803.40 an ounce June palladium up $7.90 to $787.60 an ounce

Livestock: April live cattle up 0.45 cent to $1.141 a pound March feeder cattle up 0.425 cent to $1.29825 a pound April lean hogs up 0.7 cent to 90.2 cents a pound

Grains: May soybeans up 45.75 cents to $13.75 a bushel May corn up 25.5 cents to $7.22 a bushel May wheat up 28.75 cents to $8.1125 a bushel May rice up 50 cents to $14.31 per 100 pounds May oats up 9 cents to $3.79 a bushel

Food and Fiber: May coffee up 3.15 cents to $2.678 a pound May cocoa up $14 to $3,639 a metric ton May cotton up 7 cents to $1.8423 a pound May sugar up 0.91 cent to 28.74 cents a pound May orange juice down 0.3 cent to $1.8025 a pound

Energy: April crude oil up 60 cents to $97.88 a barrel April natural gas up 13.3 cents to $4.005 per million British thermal units March heating oil up 5.36 cents to $2.9309 a gallon March gasoline up 2.28 cents to $2.7395 a gallon

Others: May copper up 11.15 cents to $4.455 a pound May lumber up 90 cents to $308.40 per 1,000 board feet

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.