Commodities Gain for Fourth Day as Oil, Gold Buoyed by Middle East Turmoil
Commodities gained for a fourth day, led by oil and precious metals, as military intervention in Libya renewed concerns that Middle East unrest may spread and disrupt fuel supplies.
The Standard & Poor’s GSCI Spot Index of 24 commodity futures increased as much as 1.5 percent and was up 1.3 percent at 710.94 as of 3:37 p.m. in Singapore. Crude oil rose as much as 2.3 percent today, while gold climbed for a fourth day and copper gained.
“The market is refocusing on issues in the Middle East,” Ben Westmore, an analyst at National Bank of Australia Ltd. in Melbourne, said today by phone. “Supply issues seem not to be going away in the short term.”
Commodities measured by the index gained 0.2 percent last week, even after Japan’s worst recorded earthquake, tsunami and ensuing nuclear crisis prompted its worst daily loss since July 2009 on March 15. Sentiment will likely stay fragile as the situations in Japan and the Middle East remain “fluid,” Stefan Graber, a Credit Suisse Group AG analyst, said today in a report.
Crude oil rose 1.9 percent to $103.02 a barrel, taking this year’s advance to almost 13 percent. Immediate-delivery bullion added 0.6 percent to $1,427.88 an ounce, about 1.2 percent below the record $1,444.95 reached on March 7.
Allied officials said attacks by the U.S., U.K., Italy and France have grounded Muammar Qaddafi’s air force and driven back his offensive against the rebel stronghold at Benghazi. Tomahawk missiles were fired at Libyan targets and fighter jets patrolled the skies.
“Geopolitical tensions in Libya lifted safe-haven demand,” Mark Pervan, head of commodity research at ANZ Banking Group Ltd., wrote in a note today.
In Japan, temperatures at all six spent-fuel storage pools at the crippled Fukushima Dai-Ichi nuclear complex are below boiling point, indicating efforts to cool fuel rods may be working. U.S. Energy Secretary Steven Chu said the Obama administration believes the worst of the crisis is over.
It may take five years for Japan to rebuild after the earthquake and tsunami, which killed at least 8,450 people and destroyed thousands of buildings, the World Bank said in a report today. Japan is the world’s largest importer of corn and the third-largest user of crude oil.
In the week ended March 15, an index of managed-money net- long positions, or wagers on rising prices, in 18 commodities tumbled 14 percent from a week earlier to 1.27 million U.S. futures and options contracts, government data compiled by Bloomberg show. That’s the biggest drop since the week ended June 29, and the smallest level of net-long holdings since August.
Copper gained 0.4 percent to $9,550 a metric ton on the London Metal Exchange.
“Demand from China remains firm, judging from indicators like Chinese industrial production and the manufacturing PMI survey,” said Credit Suisse’s Graber.
China’s manufacturing expanded at a rate of 52.2 in January, according to the China Federation of Logistics and Purchasing. A reading above 50 indicates expansion.
Spot platinum gained for a third day, adding as much as 0.8 percent to $1,736.80 an ounce. Palladium advanced 1.2 percent to $739.75.
Wheat for May delivery climbed 1.5 percent to $7.335 a bushel on the Chicago Board of Trade, while corn for delivery in the same month gained 1.5 percent to $6.94 a bushel.
To contact the editor responsible for this story: James Poole at firstname.lastname@example.org