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Commodities rose the most in five weeks and oil jumped as the dollar weakened against the euro and U.S. lawmakers prepared to resume budget talks.
The Standard & Poor’s GSCI Spot Index of 24 raw materials gained 1.3 percent, the biggest increase since Nov. 19. The euro strengthened against the dollar for the first time in four days. President Barack Obama planned to resume talks with congressional officials to avert spending cuts and tax increases that start from Jan. 1.
“The likelihood of anything substantive is extremely low,” said James Dailey, who manages $215 million at TEAM Financial Asset Management LLC in Harrisburg, Pennsylvania. “Whether they’ll put together some kind of patch to get us through another four or twelve weeks, I won’t completely eliminate the chance of that happening.”
The S&P’s GSCI index advanced to 646.31, the highest level since Dec. 3. The euro strengthened as much as 0.5 percent to $1.3254. A stronger euro and weaker dollar increase oil’s appeal as an investment alternative.
Oil for February delivery added $2.37, or 2.7 percent, to end at $90.98 a barrel on the New York Mercantile Exchange, the highest settlement since Oct. 18. The futures account for about 30 percent of the GSCI index.
Brent oil for February settlement rose $2.27, or 2.1 percent, to close at $110.07 a barrel on the London-based ICE Futures Europe.
Natural gas gained for the first time in three days as freezing weather spurred demand for heating fuels. Futures for January delivery rose 1.4 percent to end at $3.392 per million British thermal units on the Nymex.
In other commodities, copper capped the biggest gain in almost four weeks after workers rejected a wage proposal at BHP Billiton Ltd. (BHP)’s Escondida mine, the world’s largest source of the metal.
Copper futures for March delivery climbed 1.5 percent to settle at $3.5975 a pound on the Comex in New York.
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