Bloomberg News

Commodities Extend Rally on Greek Deal Optimism, China Bank Cut

February 20, 2012

Feb. 20 (Bloomberg) -- Commodities gained for a fourth day after China cut banks’ reserve requirements and speculation increased that euro-area governments are set to agree on a deal to release a second bailout for Greece, hurting the dollar.

Oil rose as much as 1.9 percent to $105.21 per barrel in New York, the highest intraday price since May 5, after Iran said it halted some crude exports to Europe. Copper in London advanced as much as 2.7 percent to $8,396.50 per metric ton, rising for the first day in seven as base metals rallied.

China cut the amount of cash that banks must set aside as reserves by half a percentage point from Feb. 24, the People’s Bank of China said Feb. 18. European finance ministers meet in Brussels today to try and close in on the 130 billion-euro ($172 billion) Greek bailout. The dollar declined against most of its 16 major counterparts, according to data tracked by Bloomberg.

“There’s a general feeling of optimism ahead of the Greece conclusion,” Jonathan Barratt, chief executive of Barratt’s Bulletin, a commodity-markets newsletter, said from Sydney. “They think they will resolve any outstanding disputes.”

The Standard & Poor’s GSCI Spot Index of 24 commodities gained for a third day on Feb. 17 to touch 689.75, the highest level since Aug. 1. There was no updated data today as some U.S. financial markets are closed for a holiday.

Oil for March delivery traded at $104.99 per barrel on the New York Mercantile Exchange at midday in Singapore, gaining for a fourth day in the best winning run this year.

Three-month copper traded at $8,315.25 per ton on the London Metal Exchange as China’s policy change fueled speculation that base-metal demand may increase in the world’s largest user. Zinc, tin, lead, nickel, aluminum advanced.

Spot gold rose as much as 0.8 percent to $1,737.18 an ounce and was at $1,734.45 as silver, platinum and palladium gained.

July-delivery rubber rose to the highest since Sept. 26 on the Tokyo Commodity Exchange, gaining as much as 3.1 percent to 328.1 yen a kilogram ($4,124 a metric ton) and was at 326 yen.

--Editors: Jake Lloyd-Smith, Ovais Subhani

To contact the reporter for this story: Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net


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