Oil, metals rise

A RALLY in the US stock market and fears of a tropical storm moving into the Gulf of Mexico sent US oil prices skyrocketing.

The rally was supported by better than expected US economic data and strong corporate earnings while a developing tropical storm that has already caused flooding in Puerto Rico, the Dominican Republic and Haiti, raised concerns that production in the GoM could be shut-in.

Some ships involved in the BP oil spill clean-up have reportedly been ordered to return to port and Shell has begun evacuating non-essential personnel from its operations, the Associated Press reported.

However, Singapore's Tapis crude remained behind the news closing at $US79.23 per barrel on Thursday, down from $US82.55/bbl on Wednesday.

On the commodities front, spot gold climbed back to $1194.55 an ounce today on the back of a broad-based commodities rally, after hitting a low of $1182.65/oz on Monday, before regaining some ground mid-week.

The precious metal still hasn't registered two consecutive up days since June 24-25.

As for nickel, it has climbed back above $20,000 a tonne for the first time all week, with its price on the London Metal Exchange reaching $20,255/t overnight from the previous price of $19,875/t. It reached a weekly low of $18,850/t.

Copper has also had a run this week, closing at $7010/t and leading a strong rally in base metals overnight on the LME.

It started the week trading at $6669/t before dropping back even further on Monday to $6512/t, but strong gains in the US, as well as a two-month high on funding buying and short coverings, coupled with strong earnings results and a better than expected eurozone economic data, drove market confidence overnight.


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