COMMODITIES-Record oil boosts other commodities

By Annika Breidthardt

SINGAPORE, April 28 (Reuters) - Oil prices powered to an all-time peak near $120 a barrel on Monday on renewed supply fears, prompting investors to move into other commodities, such as metals and agricultural products.

However, investors may hold off taking large positions before the U.S. Federal Reserve's interest rates decision on Wednesday, when it is expected to cut rates by a quarter percentage point from the current 2.25 percent. [ID:nN27414714]

U.S. light crude for June delivery CLc1 struck a record of $119.93 a barrel, as a strike closed a major British oil pipeline and as new violence in Nigeria reignited supply fears. [ID:nL28561802]

"Supply-side concerns underpinned the oil price," said David Moore, a commodity strategist at the Commonwealth Bank of Australia.

Oil has risen five-fold since 2002, as booming demand from emerging markets such as China has coincided with long-term supply constraints and a slumping U.S. dollar. The latter has has attracted speculative fund inflows into commodities.

Reflecting the strength of commodities, the Reuters-Jefferies CRB index .CRB of 19 commodity futures, which has already climbed 16 percent this year, rose 0.7 percent by 0634 GMT.

On Monday, the dollar climbed to a two-month high against the yen, but the bounce is unlikely to signal a reversal of its long-term downward direction.

As the dollar weakens relative to the yen, euro and pound, holders of these currencies gain more purchasing power over dollar-denominated goods.