Crude oil rose, capping the biggest weekly gain in two years, on concern that the turmoil in Libya will spread to Middle East petroleum producers. Grains jumped, driving a measure of raw materials up to a record.
The standoff between an increasingly isolated Libyan strongman Muammar Gaddafi and rebel factions now in control of oil-rich eastern Libya has cut output in the world’s No. 12 crude exporter by at least 25%, or 400,000 barrels a day.
Last week, oil jumped 14%, the most since late February 2009. The price has climbed 25% in the past 12 months.
As for the week ahead, traders’ attention should be devoted to all developments from the Middle East, as this is likely to continue to play a leading role in commodities trading. Traders should take under consideration that as long as the unrest in the region remain, crude prices might be further supported.
Spot gold inched up on Monday, heading for its best month since last August, boosted by fears over the deteriorating situation in Libya and spreading violence in the region, supported by rising oil prices.
Political turmoil in the region has been supportive of gold prices in recent weeks. Gold was poised to stage a monthly gain of 6%, its best since last August.
Spot gold inched up 0.3% to $1,416 an ounce, extending gains from the previous session.
Scenes in Libya, where protesters intensified their campaign to force Muammar Qadafi to quit, have encouraged some safe-haven buying of gold, although this support is unlikely to last long.