Crude oil and gasoline rose to records on growing concern about violence in the Middle East and supply disruptions from Brazil to Nigeria. Oil jumped as high as $147.27 a barrel after the Jerusalem Post said Israeli war planes practiced over Iraq. Israeli government spokesman Mark Regev denied the report. A Brazilian oil workers union is planning a five-day strike. Prices have jumped more than $10 a barrel since July 9.
Israeli war planes are conducting maneuvers in Iraqi airspace and using U.S. airbases in the country, possibly preparing for a strike against Iran, the newspaper reported, citing comments by Iraqi officials in local media. Iran, the Organization of Petroleum Exporting Countries' second-biggest producer, this week tested missiles capable of reaching Israel. Iran has also said it may blockade the Strait of Hormuz, the shipping lane for a fifth of the world's crude, if its nuclear facilities are attacked.
About 4,500 employees of state-controlled Petroleo Brasileiro SA will take part in a protest on platforms in the offshore Campos Basin%. The basin is responsible for about 80% of the country's oil production. The Movement for the Emancipation of the Niger Delta said attacks will resume on oil facilities. The Nigerian militant group said it will call off its unilateral cease-fire beginning at midnight on July 12. MEND's attacks on pipelines and other installations have cut more than 20 percent of Nigeria's oil exports since 2006. MEND says it is fighting for a greater share of oil wealth for the impoverished inhabitants of the Niger Delta.
Oil also rose because of the weakening dollar, which bolstered the appeal of commodities as a hedge against the U.S. currency's drop. Crude oil for August delivery rose to $145.08 a barrel or 0.6%. Futures have doubled over the past year. Brent crude oil for August settlement rose 0.05% to $144.49 a barrel.
Gold rose to the highest since March as record energy costs and slumping equities spurred demand for the metal as a haven. Gold reached a record $1,033.90 an ounce on March 17. Gold futures for August delivery climbed to $960.60 an ounce. Gold gained 2.9% this week, the fourth consecutive advance. Gold peaked four months ago when the Federal Reserve cut the interest rate on direct loans to banks in an emergency meeting and stocks plunged worldwide after Bear Stearns agreed to be bought by JPMorgan Chase & Co. to avoid a collapse. Silver futures for September delivery jumped 2.4% last week, the fourth straight gain. Silver has gained 26% this year, while gold is up 15% .
Aluminium prices hit a record last week as China, the world’s biggest producer, ordered smelters to reduce production because of power shortages. China’s top 20 aluminium producers agreed to cut their output by as much as 10% with immediate effect. Aluminium rose 7.1% on the week to a record $3,380 a tonne. Lead surged from last week’s one-year low as falling stocks prompted traders to cover short positions. The metal gained 26% to $1,970 a tonne.