TOCOM climbs as surging oil prices boost risk appetite

TOKYO: Benchmark Tokyo rubber futures climbed for a second straight session on Wednesday, moving further away from an about 21-month low hit earlier this week, as surging oil prices boosted risk appetite among investors.

Oil prices rose on a supply disruption in Canada, falling U.S. crude stocks, uncertainty over Libyan exports and after U.S. officials told importers to stop buying Iranian crude from November.

"A rally in U.S. oil price to above $70 a barrel lent support," said Satoru Yoshida, a commodity analyst with Rakuten Securities.

U.S. oil topped $70 for the first time in two months on Tuesday as Washington pushed allies to halt imports of Iranian crude, which would constrain global supplies.

The Tokyo Commodity Exchange rubber contract for November delivery  finished 1.3 yen, or 0.8 percent, higher at 173.8 yen ($1.58) per kg.

"Still, rubber prices have been swayed by external factors such as oil prices that have been driven by political news," Yoshida said.

"It means that the market trend could quickly change again if there is new development in political situations."

The TOCOM futures, which set the tone for rubber prices in Southeast Asia, have lost about 15 percent from May's high by early this week.

The most-active rubber contract on the Shanghai futures exchange for September delivery rose 50 yuan to finish at 10,490 yuan ($1,588) per tonne.

The front-month rubber contract on Singapore's SICOM exchange for July delivery last traded at 135.5 U.S. cents per kg, down 0.8 cent.