Oil, Gold Climb on Libya Fighting; Greek Debt Risk Increases

Oil rose to a 29-month high and gold jumped to a record as fighting in Libya intensified, while about $15 billion in potential takeovers boosted European stocks. Greek default risk climbed after Moody’s Investors Service cut the nation’s credit rating by three steps.

Oil advanced 2.3 percent to $106.84 a barrel at 7:55 a.m. in New York. Gold rallied to $1,444.30 an ounce. The Stoxx Europe 600 Index gained 0.3 percent and S&P 500 Index futures were little changed. Bulgari SpA soared 58 percent after a takeover bid by LVMH Moet Hennessy Louis Vuitton SA. The cost of insuring Greek government debt rose to a two-month high and the nation’s 10-year bond yield climbed seven basis points to 12.32 percent. The euro strengthened against 0.3 percent the dollar.

Fighting increased between Libyan rebels and troops loyal to Muammar Qaddafi, reducing the nation’s crude-oil output by as much as 1 million barrels a day, according to the International Energy Agency. Saudi Arabia released a leading Shiite cleric as websites called for a “Day of Rage,” according to two activists and Human Rights Watch. Bulgari surged after LVMH agreed to buy the world’s third-largest jeweler for about 3.7 billion euros ($5.2 billion).

“A swift return to normality is unlikely” a team of analysts led by Eugen Weinberg, the Frankfurt-based head of commodities research at Commerzbank AG, wrote in a report. “It is essentially the fear of the unrest spreading across the entire region which is pushing oil prices up.”