09.06.2008 11:36

COMMODITIES: weekly review

Crude oil surged to a new records last week as the dollar weakened after the U.S. unemployment rate grew the most in two decades and Morgan Stanley said prices may reach $150 within a month. The dollar weakened against the euro after unemployment rose to 5.5%, signaling the Federal Reserve may be reluctant to increase interest rates. Oil also rose after an Israeli minister said an attack on Iran may be necessary.
A decline in oil prices earlier in the week came after Congress held hearings on possible energy price manipulation, and billionaire investor George Soros said an oil price ``bubble'' is working with fundamentals in the market that may lead to a recession. Prices rose Thursday after European Central Bank President Jean-Claude Trichet's comment that the bank may raise interest rates next month caused the dollar to fall against the euro.

Crude oil for July delivery rose to $138.54 a barrel Friday's increase was the biggest gain in dollar terms ever and the largest on a percentage basis since June 1996. Oil rose to an all-time high $139.12 a barrel during trading. Brent crude oil for July settlement rose to $137.69 a barrel, a record close, after reaching an all-time high of $138.12 a barrel. Oil has surged to records this year partly because investors have turned to commodities as a hedge against the falling dollar.

Gold jumped the most in six months after the U.S. jobless rate had the biggest gain in more than two decades, spurring a drop in the dollar. Gold futures for August delivery rose to $899 an ounce. That marks the biggest gain for a most- active contract since Nov. 23. Gold may climb to $930 and silver will rise above $18 by mid-July, Sandeep Rungta, a metals strategist at Proficient Commodities in Kolkata, India, said in a report.

Copper jumped the most in three weeks as the dollar weakened on a rise in U.S. unemployment, boosting demand for the metal as a store of value. Copper has gained 19% this year as the dollar fell to record lows, boosting demand for commodities priced in the currency. The metal also gained today as global stockpiles fell, helping to quell demand concerns, Barclays Capital analysts wrote in a report today. Inventories monitored by the London Metal Exchange dropped 950 metric tons, or 0.8%, to 122,550 tons, marking a 1.9% decline this week. Supplies tallied by the Shanghai Futures Exchange fell 13% to 38,829 tons last week. The price rose 0.5% in the past week, the first weekly rise since May 16, as the dollar weakened. On the London Metal Exchange, copper gained to $8,000 a ton. The metal touched a record $8,880 on April 17.