KUALA LUMPUR: Malaysian palm oil futures reversed early losses on Friday to hit a record high of nearly 5,000 ringgit ($1,197.32) a tonne, setting the contract for a 10.2% weekly surge tracking Dalian prices, helped by tight supply outlook.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange closed up 117 ringgit, or 2.41%, to 4,966 ringgit ($1,189.18) a tonne, rising for a third consecutive week.

The contract is adjusting to rival oil prices on the Dalian exchange, a Kuala Lumpur-based trader said.

The Dalian exchange reopened trading after a week-long holiday in China. Its most-active soyoil contract jumped 4.7%, while its palm oil contract surged 7.2%.

Soyaoil prices on the Chicago Board of Trade were up 0.7%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Oil prices rose, and were on track for nearly 5% gains this week, on signs some industries have begun switching fuel from high-priced gas to oil and on doubts the US government would release oil from its strategic reserves for now.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

Indonesia's August exports of palm oil, including refined products such as oleochemicals, rose 59% year on year to 4.27 million tonnes, data from the Indonesian Palm Oil Association (GAPKI) showed.