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Syria crisis sparks rallies in crude oil, gold
August 28, 2013 / 10:03 PM / in 4 years

Syria crisis sparks rallies in crude oil, gold

Gold bars are pictured at the GSA Austria ( Money Service Austria ) company's headquarters in Vienna July 22, 2013. REUTERS/Leonhard Foeger

NEW YORK (Reuters) - Oil and gold prices surged for a second straight day on Wednesday as speculation of an imminent military strike on Syria raised worries about Middle East oil supplies and pushed safe-haven investors toward precious metals.

Copper prices extended their downtrend as the looming Western-led strike on Syria made investors in base metals more cautious over risk. Concern about rising copper stockpiles in China also weighed on prices. <MET/L>

In crop markets, raw sugar fell on increased cane crushing in Brazil, the world’s largest producer of the sweetener. Cocoa rallied on speculative buying with an eye on weather forecasts in West Africa. Soybeans rose on signs of strong export demand for U.S. soy and worries that rain forecast for the Midwest will arrive too late to be of much help to the maturing U.S. crop. <SOF/L> <GRA/>

The 19-commodity Thomson Reuters-Jefferies CRB index .TRJCRB settled up 0.3 percent as higher oil, gasoline, cocoa and soybean prices offset losses in copper and other base metals such as nickel and aluminum.

International benchmark Brent crude oil hit a six-month high and gained over 5 percent in two sessions as U.S. officials sketched out plans for multinational strikes against forces of Syrian President Bashar al-Assad, blamed for poison gas attacks last week.

Syria is not a major oil producer, but financial markets are worried that violence there could disrupt other oil exporters in the Middle East.

When a strike may come is not known, but oil markets are already on edge over a steep drop in exports from Libya where a month-long strike by armed security guards shut the main ports. The OPEC nation’s output has dropped to 250,000 barrels per day from prewar levels of 1.6 million bpd.

Brent crude settled up $2.25 at $116.61 after hitting a six-month high of $117.34. U.S. crude gained $1.09 to settle at $110.10. <O/R>

In gold, the spot price of bullion was up 0.2 percent at $1,416.26 an ounce by 4:10 p.m. (2010 GMT), having earlier hit $1,433.31, its highest price since May 14.

U.S. gold futures for December delivery settled down $1.40 an ounce at $1,418.60, with trading volume about 10 percent below its 30-day average, preliminary Reuters data showed.

After tumbling to a three-year low of $1,180 on June 28, the price of gold has now rallied 21 percent in the last two months. <GOL/>

Editing by Jim Marshall

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