KUALA LUMPUR, June 27: Malaysian crude palm oil futures finished up 2.5 per cent on Friday, helped by a fresh peak in crude oil prices and short-covering.

Oil leapt to a new record high near $142 a barrel on Friday, as tumbling global stock markets triggered a wider commodities rally.

There’s widespread short-covering across the market, a trader said.“The firmness in crude oil also helped support the momentum.” At the close, the benchmark September contract on the Bursa Malaysia Derivatives Exchange was up 88 ringgit to 3,623 ringgit ($1,111) a ton, the day’s high.

But some traders said high stock levels were weighing on the market.

The market is caught in an unenviable position, said a trader with a local commodities broker. External factors like soyoil and crude oil support but the lack of further demand is leading to looming stockpiles and weakening seller’s bargaining powers. Other traded months rose between 25 and 111 ringgit

Overall traded volumes stood at 12,168 lots of 25 tons each.

Traders say stockpiles of palm oil are likely to rise to record levels of around 2 million tons as demand from traditional consumers has slowed.

Other traders remain more optimistic, saying China, India and Pakistan would start buying in a big way just two months before the festival starts in early September.

Palm oil prices may be cheapest among the vegetable oils but it’s still too expensive and consumers are waiting for prices to fall further, especially since there are high stock levels said another analyst.

In Malaysia’s cash market, crude palm oil for June and July shipments in the southern region were quoted at 3,610/3,630 ringgit a ton. Trades were done at 3,570-3,620 ringgit.—Reuters