Oil Report

Tokyo rubber sprints to fresh 28-year high on oil

TOKYO, June 27 (Reuters) - Tokyo rubber futures jumped more than 2 percent to touch a fresh 28-year high above 356 yen on Friday, as record high crude oil prices spurred buying.

* At 0051 GMT, the key Tokyo Commodity Exchange rubber contract for December delivery <0#JRU:> climbed 8.8 yen, or about 2.5 percent, to 356.7 yen per kg, the highest since March 1980.

It then drifted down to around 356 yen.

* Oil prices surged nearly 4 percent to a record of over $140 a barrel on Thursday after Libya said it was studying possible options to cut output in response to potential U.S. actions against producer countries.

* U.S. crude CLc1 was hovering above $139 on Thursday.

* Rubber prices often benefit from high crude oil prices because investors believe expensive oil will encourage a shift to natural rubber from synthetic rubber, a petroleum product.

* Physical rubber prices have hovered at high levels as rain in some areas of producing countries including Thailand, the world’s largest, have slowed tapping and caused supplies to remain tight. Buyers have refrained from purchasing actively. (Reporting by Miho Yoshikawa)