Oil Rises on Iraq Violence as Palladium Jumps; Asian Stocks Drop

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Oil rose and palladium led precious metals higher as the escalation of violence in Iraq stoked concern crude supplies will be disrupted and boosted the appeal of haven assets. Asian stocks retreated with U.S. index futures.

Brent oil rose 0.5 percent to $113.05 a barrel by 9:50 a.m. in Tokyo as West Texas Intermediate crude added 0.4 percent in a fourth day of gains. Palladium rose 0.9 percent and gold touched an almost three-week high. The yen gained with U.S. Treasuries and Australian bonds. The MSCI Asia Pacific Index dropped 0.2 percent after five weeks of gains, as Japan��s Topix index fell 0.4 percent. Standard & Poor��s 500 Index futures lost 0.3 percent after the benchmark U.S. gauge rebounded June 13.

The army killed more than 279 rebels yesterday in Iraq, OPEC��s second-largest producer, as the prospect of civil war intensifies with Sunni Muslim insurgents controlling territory north of Baghdad. In Ukraine, tensions escalated at the weekend with 49 servicemen killed when pro-Russia fighters shot down a plane. India is projected to report faster wholesale-price growth for May today, while in the U.S., factory data is due before the Federal Reserve reviews policy later this week.

Source Bloomberg