Commodities rose to the highest since May, led by surging energy prices, as tensions in the Middle East escalated and improving economic data signaled rising demand for raw materials.
The Standard & Poor’s GSCI Spot Index of 24 raw materials rose 1.4 percent to settle at 713.18 at 3:48 p.m. New York time, after touching 717.45, the highest since May 5. Crude oil topped $110 a barrel for the first time in 10 months, and gold futures rebounded from the biggest decline of the year.
Crude-oil futures surged after a report of a pipeline explosion in Saudi Arabia added to concern that supplies may be disrupted as the U.S. steps up pressure on Iran to stop developing nuclear weapons. Commodities also gained as data showed a third straight monthly expansion in Chinese manufacturing, and U.S. auto sales and jobless claims that were better than analysts forecast.
“Energy prices are being pushed by fear and the concern over supply disruptions,” Dennis Cajigas, a senior market strategist at Zaner Group in Chicago, said in a telephone interview. “We also saw some better numbers coming out of China, and that’s helping metals.”
Crude oil for April delivery rose 1.7 percent to close at $108.84 a barrel on the New York Mercantile Exchange. In electronic trading after the settlement, the price reached $101.55, the highest since May 4.
The report of the pipeline blast, which appeared on English-language websites from the Middle East, explained the rise in the oil market after 2:30 p.m., said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy.
Oil rose in regular trading as the U.S. warned Iran to halt its nuclear program and after a report showed the number of Americans filing first-time claims for unemployment benefits fell to the lowest in almost four years.
In China, the world’s biggest consumer of everything from zinc to copper to cotton, a purchasing managers index rose by more than economists forecast in a Bloomberg survey.
The Standard & Poor’s Industrial Metals Spot Index climbed 1.1 percent, as copper rebounded from its biggest drop in more than a week. Copper futures for May delivery advanced 1.3 percent to settle at $3.9315 a pound on the Comex in New York. Prices slid 1.1 percent yesterday, the most since Feb. 17.
“This is very much a China story, with the manufacturing numbers coming out stronger than people expected,” Bart Melek, the head of commodity strategy at TD Securities in Toronto, said in a telephone interview. “Markets are thinking there will be a soft landing in China, and that copper demand over the long term does OK.”
Gold futures for April delivery advanced 0.6 percent to settle at $1,722.20 an ounce on the Comex. Bullion lost 4.3 percent yesterday in the biggest one-day slump since Dec. 14, after the Federal Reserve gave no signal that it favored a third round of economic stimulus.
Commodities, led by oil, beat stocks, bonds and the dollar in February for the first month since July. The Standard & Poor’s GSCI Total Return Index of 24 raw materials rose 6.1 percent in February, extending the previous month’s 2.2 percent gain, as Brent crude advanced 11 percent.