12.05.2008 11:23

COMMODITIES: weekly review

Crude oil rose above $126 a barrel last week as the dollar weakened against the euro, prompting investors to buy commodities as a hedge against the currency's decline. For a fifth day oil climbed to all-time highs as the euro strengthened on signs the European Central Bank will keep rates at a six-year high to cut inflation.

The Organization of Petroleum Exporting Countries, the producer of more than 40% of the world's oil, may meet before September to consider increasing output in an attempt to rein in record crude-oil prices, Libya's Shokri Ghanem said. Nigerian Petroleum Minister of State H. Odein Ajumogobia said today that there are no plans for an additional OPEC meeting because oil supplies are adequate. OPEC kept its production target unchanged at its past three meetings. The group last increased its target on Nov. 1.

Crude oil for June delivery rose to $125.96 a barrel. The contract surged to $126.27 Friday, the highest since futures began trading in 1983. Prices are up 8.3% last week, the biggest weekly gain in more than a year. Futures have more than doubled in the past year. Brent crude oil for June settlement climbed to $125.40 a barrel. The contract touched $125.90 Friday, the highest since trading began in 1988.

Gold rose last week, capping the biggest weekly gain since February, on speculation a weaker dollar and rising energy costs will boost investor demand for the metal as a hedge against inflation. Gold futures for June delivery gained to $885.80 an ounce. The metal rose 3.2% last week, the biggest gain late February. Silver futures rose to $16.91 an ounce. The price has advanced 13% this year.

Copper fell on rising stocks, falling demand from Asia and as equity market weakness re-ignited fears of lower demand ahead. The London Metal exchange reported, in a daily note, that copper stocks across the world rose over 11,000 tonnes. Copper closed at $8,189 per tonne. Meanwhile, a firmer dollar has also pressured metals, with commodities priced in the U.S. currency becoming less attractive as a hedge against rising inflation and the greenback's recent slump.