Mar 08, 2016 (LBO) – Oil rose to a two-month high, up 5.5 percent, on a technical rally which is being closely watched by markets, as iron ore jumped 19 percent, and Gold rose to its highest in a year.
Brent crude rose 5.5 percent to 40.8 dollars per barrel, as analysts said a break of resistance between 40 and 42 levels could signal a more substantial rally.
Oil has rallied to levels last seen in early December with Russia, Saudi Arabia saying they would freeze production, provided others came on board.
A group of OPEC producer countries could meet in Moscow later this month, which could lead to co-ordinated action according to BBC.
Iron ore reported its biggest ever jump on expectations that China was cutting production. The slowing Chinese economy had led to a fall in demand for iron ore, creating a global glut.
“The iron ore and steel markets have gone berserk — they’ve departed from fundamentals and are heavily driven by sentiment,” said Zhao Chaoyue, an analyst at China Merchants Futures Co. in Shenzhen, according to a Bloomberg report.
“Investors are expecting further monetary easing by the Chinese government to boost steel demand.”
Iron ore’s near 20 percent rally follows copper’s move back above 5,000 dollars a ton on Friday, while platinum has jumped above 1,000 dollars an ounce.
Some stocks linked to commodities are rising dramatically with Glencore Plc up 89 percent, fellow copper miner Freeport-McMoRan Inc. up 46 percent, and gold miners Sibanye Gold Ltd. soaring 140 percent, and AngloGold Ashanti Ltd. up 98 percent.