Oil, grains push market higher

Oil closed up on Friday after hitting a three-week high on optimism that Europe was tackling its huge debt problem while agricultural markets rallied on worries about the impact of excessive summer heat on crops. Crude oil prices closed up for a fourth straight day in New York, gaining nearly 3 per cent on the week. In Chicago, wheat futures rose over 2 per cent on the day, posting their best gain in a week. The 19-commodity Reuters-Jefferies CRB index rose nearly 1 per cent as gold, coffee and sugar prices also climbed. A tumble in cocoa which fell more than 3 per cent, posting its biggest decline in nearly three months, on fears of a supply surplus offset some of the CRB's advance. Traders said the CRB could rise further if US economic data in the week ahead proved more encouraging. A surfeit of data is expected through Friday, including readings on consumer confidence, home sales, durable goods orders, initial jobless claims and New York state's manufacturing. Commodities could also rally from a potential drop in the dollar next week, on concerns that the United States may lose its top-notch credit rating in the event of a credit default. Traders said fears of a full-blown Eurozone debt crisis have subsided after the announcement of a second bailout for Greece and focus has shifted to Washington, where politicians are still wrangling over lifting the US debt ceiling as an August 2 deadline loomed. "There's much less cooperation amongst the US legislators than there is amongst the Europeans. That kind of dichotomy could begin to hurt the dollar ..." said Boris Schlossberg, director of currency research at GFT in New York. "If the markets don't hear anything going into the weekend, I think the first instinct will be to sell [the dollar] first and ask questions later. From / Gulf News