Yemen Bombing Spurs Gains in Most Commodities as Oil AdvancesWhitney McFerron
Escalating violence in Yemen sparked a rally across energy commodities and metals.
Oil rose more than 4 percent, gold climbed for a seventh day and most of the main industrial metals advanced, with copper reaching an almost three-month high. The Bloomberg Commodity Index of 22 raw materials added 1.3 percent as of 12:19 p.m. in London. The measure is set for the highest close in three weeks.
Saudi Arabia led a coalition of Sunni allies, including United Arab Emirates, Kuwait, Bahrain and Qatar, in air strikes in Yemen against Shiite rebels. Yemen shares a border with Saudi Arabia, the world’s biggest crude exporter, and sits on one side of a shipping chokepoint used by crude tankers heading West from the Persian Gulf. Saudi Arabia may send ground troops to Yemen, Saudi state TV reported, citing a person it didn’t identify.
“Its proximity to Saudi Arabia and the current tensions between Sunnis and Shiites makes this a problem we cannot ignore,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen. “The past 24 hours have been supportive for crude oil and precious metals.”
West Texas Intermediate topped $52 a barrel, surging as much as 6.6 percent. Yemen produced about 133,000 barrels a day of crude in 2013, making it the 39th biggest producer, according to the U.S. Energy Information Administration. Saudi Arabia has accused Shiite Iran of fomenting unrest in country.
Demand for a safe haven spurred gains in precious metals, putting gold on track for a seven-day advance, the longest run since 2012. Bullion for immediate delivery surpassed $1,200 an ounce, while silver and platinum increased more than 1 percent.
Industrial metals rose on speculation higher energy prices will increase costs for miners and smelters, raising the price floor they need to be profitable. Codelco, the world’s biggest copper producer, shut all of its Atacama mines as rains in northern Chile closed roads and flooded towns. Copper on the London Metal Exchange increased 1.6 percent to $6,225 a metric ton. Aluminum and zinc added at least 1.4 percent.
Among commodities tracked by the Bloomberg index, prices for some agricultural products declined, led by losses in coffee and cotton. Natural gas also dropped in New York, erasing an earlier gain.