Commodities Climb Most in Two Months as Euro Strengthens

Commodities climbed the most in two months as the euro rose against the dollar after the European Central Bank said it’s ready to buy bonds once necessary conditions are met.

The Standard & Poor’s GSCI Spot Index of 24 raw materials increased 2.5 percent to 665.19, the biggest gain since Aug. 3. Oil futures in New York, which account for 30.25 percent of the GSCI index, rose 4.1 percent, the most since Aug. 3.

ECB President Mario Draghi said the bank is ready to start buying government bonds as soon as the conditions are fulfilled, putting the onus on Spain to decide whether it wants a bailout. ECB policy makers left the benchmark rate at a historic low of 0.75 percent.

“The primary reason for the rise in commodities is the strength of the euro,” said John Kilduff, a partner at Again Capital LLC, a New York-based energy hedge fund. “The ECB held tough and didn’t further reduce rates or change conditions for aid. They’re sticking to their guns with Spain, which is going to send dollar-based commodities higher.”

Oil for November delivery climbed $3.57 to settle at $91.71 a barrel on the New York Mercantile Exchange. Futures plunged 4.1 percent yesterday after the Energy Department reported U.S. production climbed to the highest level in more than 15 years while fuel demand decreased.

Brent oil for November rose $4.41, or 4.1 percent, to settle at $112.58 a barrel on the London-based ICE Futures Europe exchange.

The euro advanced 0.9 percent against the dollar. A stronger common currency increases the appeal of investing in dollar-denominated raw materials.

Jobless Claims

The gain in commodities came as American claims for unemployment benefits climbed less than forecast. Applications for jobless benefits increased 4,000 to 367,000 in the week ended Sept. 29, Labor Department figures showed today. Economists forecast 370,000 claims, according to the median estimate in a Bloomberg survey.

“We’re getting strength because economic data has been a little less bad than expected,” Kilduff said. “The jobs numbers point to stabilization.”

Other commodities also advanced. Gasoline for November delivery rose 14.34 cents, or 5.1 percent, to end the session at $2.9429 a gallon at in New York. November-delivery heating oil advanced 12.2 cents, or 4 percent, to $3.1884 a gallon.

Gold futures for December delivery climbed 0.9 percent to settle at $1,796.50 an ounce on the Comex in New York. Earlier, the price reached $1,797.70, the highest level for a most-active contract since Nov. 9.

Soybean prices rose the most this week on signals of increased demand for supplies from the U.S., the world’s biggest exporter. Futures for November delivery jumped 1.3 percent to $15.515 a bushel on the Chicago Board of Trade, the biggest gain since Sept. 28. The price reached a record $17.89 on Sept. 4 after a drought that the USDA said will cut output to the lowest level in nine years.

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

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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