COMMODITIES-Oil up after U.S. jobs data; metals fall on Fed fears

Fri Jun 7, 2013 4:59pm EDT

Related Topics

* U.S. jobs data aids biggest weekly Brent gains since July

* CRB has biggest weekly advance since September

* Copper, gold down on fears Fed may rethink its stimulus

By Barani Krishnan

NEW YORK, June 7 (Reuters) - Oil jumped on Friday for its largest weekly gain since mid-2012 while a broad commodities gauge registered its biggest weekly gain since September after the U.S. economy added 175,000 jobs in May.

Copper and gold fell on fears the jobs data was strong enough for the Federal Reserve to begin to scale back stimulus efforts sooner than expected.

The 19-commodity Thomson Reuters-Jefferies CRB index was up 0.2 percent for Friday and rose 2 percent for the week, the highest since September.

North Sea Brent crude oil rose nearly 1 percent to settle at $104.56 a barrel. Brent's 4.3 percent weekly gain was the biggest since July.

U.S. crude oil rose 1.3 percent, the biggest gain in six weeks, and advanced 4.5 percent for the week to close at $96.03 per barrel.

"Oil is taking a cue from the equity market, which obviously liked the employment data," said John Kilduff, a partner at Again Capital LLC in New York.

"The upside surprise versus expectation is signaling further economic improvement and energy demand."

Wall Street viewed the U.S. jobs data as showing moderate growth in the labor market but not enough forward momentum for the Fed to put the brakes on its bond-buying program in the near future.

All three major U.S. stock indexes rose more than 1 percent.

COPPER, GOLD DOWN

However, copper prices fell as investors in the base metal thought the step-up in U.S. hiring would cause the Fed to begin to abate its stimulus.

Three-month copper on the London Metal Exchange ended down 1.4 percent at $7,230 a tonne, having earlier hit a one-week low of $7,221. Copper is down nearly 4 percent so far this quarter, and some 8.5 percent this year.

The base metal was also affected by concerns about demand from China, the largest consumer for copper.

A Reuters poll showed growth in China investment and factory output probably remained listless in May on soft domestic demand.

The spot price of gold fell more than 2 percent to around $1,383 an ounce for its biggest one-day drop in over three weeks as investors in bullion saw the jobs data reducing hopes of prolonged stimulus, which weighed on gold's inflation-hedge appeal.

The dollar rose, weighing on some commodities denominated in the U.S. currency. Arabica coffee hit the lowest level since September 2009.

Supply-demand fundamentals helped some commodities to post gains, with soybean futures rising on worries that the wet weather that has stalled planting of the U.S. crop could reduce the size of the autumn harvest. (Editing by Kenneth Barry)

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