NEW YORK—Oil and copper hit record highs on Thursday while most other commodity markets were down in cautious trade ahead of a long U.S. weekend to mark the country's Independence Day holiday.
Crude on the New York Mercantile Exchange, or NYMEX, crossed the $145 a barrel milestone on bets that a weak dollar, sliding U.S. oil inventories and tensions between Israel and major oil producer Iran would combine to bring prices to $150 soon.
In a rare show of outperformance, London's Brent crude, which traditionally stays a step behind NYMEX crude, went above $146 a barrel.
Traders were at a loss to explain the phenomenon, not seen since the Brent market led NYMEX for about five months last year due to a localized glut at the physical delivery point for U.S. crude.
"No one really knows the answer," Colin Morton at U.K.'s Rensburg Fund Management said, referring to the Brent's latest run. "It seems to be about momentum now. It's going up because it is going up."
At 10:40 a.m. EDT (1440 GMT), NYMEX crude was up 35 cents at $143.92. It had surged as much as $2.28 to a record high of $145.85 earlier as traders rushed to build positions ahead of the Fourth of July market holiday.
The Brent was up 76 cents at $145.02 after racing to $146.69.
Oil prices have jumped seven-fold since 2002 as demand from emerging economies like China and India stretch supply growth.
Fears of an escalation in the showdown between Iran and the West over Tehran's nuclear program pushed prices to new peaks this week amid speculation that Israel is preparing a preemptive strike against Iran.
Copper hit a record high on the London Metal Exchange, or LME, as a mining strike in Peru entered its fourth day and stoked supply fears.
Aluminium rallied too on the LME while most other industrial metals traded on that exchange, especially lead, fell sharply.
LME copper for delivery in three months stood at $8,810 a tonne at the mid-session, down from an earlier record high of $8,940. It closed at $8,720 on Wednesday.
U.S. copper futures slated for September delivery on NYMEX's COMEX metals division was down 3.2 percent at $3.9325. Traders blamed the drop on the dollar's unexpected rebound on Thursday, along with investors' caution ahead of Friday's market holiday.
The dollar rose after Thursday's U.S. payrolls data suggested the job market had not deteriorated as much as many investors had feared. It was also bolstered by a signal from the European Central Bank that there may be no further rate increases for now in the euro zone after Thursday's 25 basis point hike.
The dollar weighed on U.S. gold futures, bringing the precious metal's benchmark August contract on COMEX down by as much as $18.50 to a session low of $928 an ounce.
Agricultural markets were also broadly lower, with soybeans for July delivery on the Chicago Board of Trade sliding as much as 24 cents to an intraday low of $16.21-3/4 a bushel after Wednesday's record high at $16.49-3/4.
The broad consolidation in commodities was mirrored by the Reuters-Jefferies CRB Index, which contracted 0.2 percent after hitting a record high of 473.97 points earlier on Thursday mainly on the strength in crude oil.
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