By Mark Shenk Dec. 8 (Bloomberg) -- Oil, copper and corn rose after President-elect Barack Obama pledged the biggest U.S. public works program in a half century to revive the economy. Commodities rebounded from last week’s losses on speculation spending on roads, bridges and repairing school buildings will boost raw material demand and engineer a recovery in the world’s largest economy. U.S. lawmakers are working to reach an agreement today on automaker aid. “The markets are cheered by the move to bail out the automobile industry and the emphatic statements from the Obama team that are pointing to a massive stimulus package,” said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. in New York. Crude oil for January delivery rose $2.89, or 7.1 percent, to $43.70 a barrel at 10:11 a.m. on the New York Mercantile Exchange. Futures touched $40.50 on Dec. 5, the lowest since Dec. 13, 2004. Oil fell the most since 1991 and metal prices slumped last week after economic data showed the recession is getting worse. The U.S. economy lost 533,000 jobs in November, bringing job losses this year to 1.91 million. Obama, in a television interview yesterday on NBC, reiterated his commitment to the biggest investments in the nation’s infrastructure since President Dwight D. Eisenhower created the interstate highway system in the 1950s. The U.S. president-elect takes office on Jan. 20. Equities Rally Stocks rallied worldwide, led by commodity producers, on Obama’s pledge to increase infrastructure spending. The Dow Jones Industrial Average rose 229.14, or 2.7 percent, to 8,864.56. The Standard & Poor’s 500 Index increased 24.35 points, or 2.8 percent, to 900.42. Copper futures for March delivery rose 11.5 cents, or 8.4 percent, to $1.5075 a pound on the Comex division of Nymex. Corn advanced for the first time in seven days. Corn futures for March delivery rose 11.75 cents, or 3.8 percent, to $3.21 a bushel on the Chicago Board of Trade. The Reuters/Jefferies CRB Index of 19 raw materials climbed as much as 3.6 percent today to 260.1. The gauge lost 54 percent since reaching a record in July, as the credit crunch choked worldwide growth. The dollar dropped versus the euro, adding support to commodity prices. A weaker U.S. currency increases demand for commodities as a hedge and makes raw materials cheaper for buyers with euros, yen or sterling. The euro rose 1.4 percent to $1.2895 from $1.2718. “It’s the Obama magic,” said Michael Lynch, president of Strategic Energy & Economic Research, in Winchester, Massachusetts. “Talk of stimulus and bailout are giving most commodities a boost. There are also rumors that OPEC will enact a large cut at the Dec. 17 meeting.” ‘Substantial’ Cut Libya’s top oil official, Shokri Ghanem, said today that the Organization of Petroleum Exporting Countries should make a “substantial” output cut at its meeting in Algeria. Saudi Arabian Oil Co. announced today it will reduce crude oil supplies to Japan in January for a second. Saudi Aramco is the world’s largest state oil company. “Prices should continue to firm up as we approach the meeting,” said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut. “I think there will be further actions taken by the Saudis and the rest of the cartel because they don’t want to see further declines.” OPEC pumps more than 40 percent of the world’s oil and agreed to cut daily output 1.5 million barrels in October as prices slumped and inventories rose. Chakib Khelil, OPEC president, said on Dec. 6 that the group may make a “severe” reduction in production to stem the 70 percent decline in prices from July’s record. Brent crude oil for January settlement rose $2.99, or 7.5 percent, to $42.73 a barrel on London’s ICE Futures Europe exchange. To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net

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