NEW YORK (Reuters) - Brent and U.S. crude oil settled Wednesday at highs unseen since 2008, when an airstrike near Libya’s oil terminal stoked fears of prolonged threats to oil supplies and pushed gold to record levels for a second day.
Brent oil settled at its highest level since August 2008 after fresh airstrikes hit Brega, about 2 km (1.2 miles) from a Libyan oil terminal. Embattled leader Muammar Gaddafi launched a land and air offensive to retake territory in Libya’s oil rich east.
The strikes raised the threat of ongoing disruptions from the OPEC nation and fears that unrest might spread to other regional producers.
The Reuters Jefferies CRB index .CRB, comprised of 19-component commodities, jumped to its highest level since September 2008, advancing 1.11 percent in late trade.
Brent crude settled 93 cents higher at $116.35 a barrel, the highest settlement since August 21, 2008. U.S. crude futures ended above $100, at $102.23 a barrel, for the first time since September 2008.
“It’s hard to say if the Libyan government is trying to target oil infrastructure in the east or whether they’re just targeting rebel-held areas, but the market’s reacting to this threat either way,” said Andy Lebow, trader at MF Global in New York.
Gold touched a record high above $1,440 an ounce, as a confluence of political unrest in Libya, surging oil prices and easy monetary policy spurred safe-haven buying.
Gold has rallied 10 percent since late January when tensions first began to flare in the Middle East and Africa.
“You have political problems all over the world, a Federal Reserve bank that still erred on the side of easing rather than tightening, rising commodities prices in general, and growing disdain for fiat currencies generally,” said Dennis Gartman, author of the Gartman Letter, an daily investment newsletter.
“It would be illogical for gold not to be going higher.”
Copper, on the other hand, managed only to eke out a small gain by the close of a choppy day. The industrial metal was buoyed by a weaker dollar and an upbeat U.S. jobs reading, but inflation concerns from higher oil prices limited the upside.
Down about 3 percent from a record hit in mid-February at $10,190 per tonne, copper prices remained tethered to volatile energy prices.
“Any time oil moves higher it gets people nervous about future growth and inflation,” said Bart Melek, vice president and director of commodities with TD Bank Financial Group.
U.S. corn futures fell 1.8 percent, the biggest drop since a plunge last week, as the surge in U.S. crude oil prompted investors to curb risk by selling out of long positions.
“The last time we had crude up, where it went $6 to $8 higher, the corn market went limit down,” said Don Roose of U.S. Commodities in West Des Moines, Iowa.
On the other hand, strong oil prices boosted sugar futures. Gains in crude oil could prompt top sugar producer Brazil to funnel more cane into ethanol, further exacerbating already tight supplies of the sweetener.
Additional reporting by Randy Fabi Nick Trevethan; Editing by Lisa Shumaker