U.S. Commodities: Oil Rises to 29-Month High on Mideast Concern

Crude oil in New York increased to a 29-month high on concern that turmoil in Libya will spread to other northern African and Middle East energy exporters, curbing shipments.

Libyan leader Muammar Qaddafi sent troops to recapture towns in the western part of the country and prepared to quash protests in the capital, Tripoli. Oil also advanced on signals that U.S. economic growth is accelerating. The nation’s jobless rate fell to 8.9 percent, the lowest since April 2009, a government report showed.

“Unrest in Libya continues to fuel concerns about supplies,” said Addison Armstrong, a director of market research at Tradition Energy, a Stamford, Connecticut-based broker. “We’re facing a weekend amid a drumbeat of instability. Nobody wants to be short when there could be a major disruption over the next two days.”

In other markets, cotton futures surged to a record on signs that global demand from textile mills will continue to outpace supplies. Gold and silver also climbed. The UBS Bloomberg Constant Maturity Commodity Index advanced 0.3 percent to 1,793.05. Earlier, the gauge reached 1,800.63, extending a rally to a record.

Oil futures for April delivery increased $2.51, or 2.5 percent, to $104.42 a barrel on the New York Mercantile Exchange, the highest settlement since Sept. 26, 2008. The price rose 6.7 percent this week, the third straight advance.

Brent crude for April settlement rose $1.18, or 1 percent, to $115.97 a barrel on London-based ICE Futures Europe. The contract gained 3.4 percent this week, the sixth straight increase.

Cotton

Cotton for May delivery jumped by the exchange limit of 7 cents, or 3.4 percent, to a record of $2.127 a pound on ICE Futures U.S. in New York. The price rose for the sixth straight session, the longest rally since Nov. 5.

Output in China, the world’s biggest consumer, fell 6.3 percent last year, the National Bureau of Statistics said this week. U.S. sales surged 56 percent to 403,341 bales in the week ended Feb. 24 from a week earlier, the U.S. Department of Agriculture said yesterday. Prices have more than doubled in the past year.

“It’s a worldwide scramble,” said John Flanagan, the president of Flanagan Trading Corp. in Fuquay-Varina, North Carolina. “The last holdouts realized there was no way out other than just buying, trying to find cotton to keep their mills running.”

Gold, Silver

Gold rose as mounting tensions in Libya boosted the appeal of the precious metal as an investment haven. Silver toped $35 an ounce, extending a rally to the highest in 31 years.

Libyan opposition leaders rejected a mediation offer by Venezuelan President Hugo Chavez as armed rebels fought for control of crude-oil ports on the central and eastern coastal strip. Gold climbed for the sixth straight week, the longest rally since September 2007. On March 2, the metal reached a record of $1,441 an ounce.

“There are still a lot of moving parts in the Middle East and North Africa,” said Adam Klopfenstein, a senior strategist at Lind-Waldock in Chicago. “People want to be long gold and silver going into a weekend where’s there’s a lot of macro risk in the market.”

Gold futures for April delivery rose $12.20, or 0.9 percent, to $1,428.60 on the Comex in New York. The metal rose 1.4 percent this week.

Silver futures for May delivery jumped $1, or 2.9 percent, to $35.327. Earlier, the price reached $35.405, the highest since March 1980. In that year, the metal reached a record $50.35.

This week, silver gained 7.3 percent, the sixth straight increase. That marked the longest rally since March 2008.

Commodities settled as follows:

Precious metals: April gold up $12.20 to $1,428.60 an ounce May silver up $1 to $35.327 an ounce April platinum up $4.90 to $1,837.90 an ounce June palladium down $5 to $809.80 an ounce

Livestock: April live cattle down 0.15 cent to $1.1405 a pound August feeder cattle up 0.325 cent to $1.34725 a pound April lean hogs down 0.325 cent to 88.475 cents a pound

Grains: May soybeans up 2 cents to $14.14 a bushel May corn down 8.75 cents to $7.28 a bushel May wheat up 8.75 cents to $8.3225 a bushel May rice up 9 cents to $14.19 per 100 pounds May oats down 4 cents to $3.90 a bushel

Food and Fiber: May coffee down 1.95 cents to $2.728 a pound May cocoa down $76 to $3,657 a metric ton May cotton up 7 cents to $2.127 a pound May sugar down 0.71 cent to 29.88 cents a pound May orange juice down 1.5 cents to $1.7305 a pound

Energy: April crude oil up $2.51 to $104.42 a barrel April natural gas up 3.1 cents to $3.809 per million British thermal units April heating oil up 4 cents to $3.0893 a gallon April gasoline up 2.02 cents to $3.0464 a gallon

Others: May copper down 0.45 cent to $4.4855 a pound May lumber up $7.30 to $322.50 per 1,000 board feet.

(Source: http://www.bloomberg.com/news/2011-03-04/u-s-commodities-oil-rises-to-29-month-high-on-mideast-concern.html)