copper nickel jump : BusinessweekExpect this trend to continue. Go DM Go.
Oil, Copper, Nickel Jump on European Bailout Plan; Gold Drops
May 10, 2010, 7:15 AM EDT
By Chanyaporn Chanjaroen
May 10 (Bloomberg) -- Crude oil rose from a 12-week low, and copper and nickel increased after a European loan package worth almost $1 trillion and a program of bonds purchases eased investors’ concerns that Europe’s sovereign debt crisis may spread and derail a global economic recovery.
Oil jumped as much as 4.5 percent to $78.51 a barrel, the biggest intraday increase since Sept. 30. Copper, which slumped 6.5 percent last week, gained 3.5 percent to $7,185 a metric ton and nickel advanced as much as 4.9 percent.
The 16 euro nations agreed to lend as much as 750 billion euros ($962 billion) to countries under attack from speculators. The European Central Bank said it will buy government and private debt. The Reuters/Jefferies CRB Index of 19 raw materials plunged 5.9 percent last week, the most since Dec. 5, 2008, on concerns the Greek debt problems would spread.
The declines in commodity prices presented a “buying opportunity,” Goldman Sachs Group Inc.’s analysts led by Jeff Currie in London said in a report today.
“We remain most constructive on crude oil, copper and precious metals, with copper in particular looking particularly attractive post the recent severe sell-off,” they said in the report. Goldman maintained its 12-month outlook for returns from commodities at 17.6 percent. The bank’s forecast relates to the S&P GSCI Enhanced Total Return Index.
The MSCI World Index of shares advanced 2.6 percent to 1,128.58 as of 11:15 a.m. in London, its first gain in five days, after slumping 8.3 percent last week. The euro surged 2 percent to $1.3008 against the dollar and headed for its biggest two-day gain since 2008 against its Japanese counterpart.
Equities, Commodities ‘Lifted’
Crude oil for June delivery rose 3.3 percent to $77.61 on the New York Mercantile Exchange, after falling to $74.51 on May 7, the lowest close since Feb. 12 and losing almost 13 percent last week. Copper for three-month delivery advanced 2.8 percent to $7,140.50 and nickel added 3.3 percent after last week’s 14 percent plunge.
Crude oil prices will likely return to $80 to $85 once the debt crisis in Greece is resolved, Algerian Energy Minister Chakib Khelil said yesterday.
The emergency package “lifted the equities markets and commodities,” Eugen Weinberg, senior commodity analyst at Commerzbank AG, said today by phone from Frankfurt. The rebounds for oil and industrial metals today didn’t completely offset losses in recent weeks, he added.
Oil and industrial metals may decline in the next six months, Weinberg said, citing oversupply as a trigger for further price corrections.
Sugar Climbs
“In the next few days there will be some recovery of risky assets including commodities,” said Charles Morris, who manages $2.5 billion at HSBC Global Asset Management’s Absolute Return fund in London. Morris said he maintained gold as the largest commodity holding in his fund, at about 11 percent of the fund this year.
Gold for immediate delivery fell as much as $24.22, or 2 percent, to $1,184.18 an ounce, the biggest drop since April 16. The metal traded at $1,193.07 at 11:17 a.m. London time. Bullion for June delivery was 1.4 percent lower at $1,193.30 on the Comex in New York.
Raw sugar for July delivery rose 0.69 cent, or 5 percent, to 14.44 cents a pound on ICE Futures U.S. in New York. It earlier climbed as much as 5.8 percent, the biggest gain for a most-active contract since April 19.
White sugar for August delivery advanced $13.10, or 3 percent, to $450.90 a ton on London’s Liffe exchange at 11:46 a.m. local time. It earlier jumped 4.7 percent, the biggest gain since April 12.
--With assistance from Li Xiaowei in Shanghai, Christian Schmollinger in Singapore, M. Shankar and Nick Larkin in London. Editors: John Deane, Stuart Wallace.