Commodities prices recovered on Thursday to their highest level in one month, up 7.5 per cent from the low hit last month, as oil prices rallied on the back of fears about a tropical storm forming in the US Gulf of Mexico, a key oil and natural gas production area.

The Reuters Jefferies CRB index, a basket of commodities, hit 266.08 points, the highest level since mid June, and up 1.5 per cent on the day. The index fell sharply last month amid fears about the impact on global economic growth and commodities demand of fiscal tightening in rich countries, as well as Beijing’s measures to cool its runaway real state sector.

Although most commodities prices rose, energy led the recovery. Crude oil prices surged to near $79 a barrel, jumping more than 3 per cent on the day.

The US National Hurricane Center said a tropical depression had formed near the Bahamas.

Jeff Master, an independent meteorologist who formerly worked at the US National Hurricane Center, said the storm would come ashore over the Florida Keys or South Florida on Friday and move into the Gulf of Mexico on Saturday.

Matt Rogers, of the Commodity Weather Group, added that the strength “should stay on the weaker side” due to unfavourable winds.

But Mr Rogers warned the range of possibilities was still broad.

Meteorologists said hurricane activity in the Atlantic would rise this season, which runs from June to November and usually peaks in early September, because El Niño, the weather-altering Pacific warming pattern, has dissipated.

Hurricanes can have a big impact on commodities. Katrina and Rita in 2005 forced widespread shutdowns of natural gas, oil production and refinery activity along the US Gulf of Mexico coast, pushing prices sharply higher.

Charley, Frances and Jeanne in 2004 and Wilma in 2005 caused lasting damage to Florida’s citrus industry, helping to push the cost of orange juice futures to a record high.

In late afternoon trading in London, Nymex September West Texas Intermediate rose $2.07 to $78.63. ICE September Brent hit $77.20.

Nymex August natural gas rose 2.4 per cent to $4.62 per million British thermal units. The more active contract for delivery in September was lower at $4.605.

Elsewhere in commodities markets, wheat prices hit a fresh 13-month high in Chicago and their highest level in 22 months in London and Paris as traders anticipated a production drop due to high temperatures and a drought in Russia and some European countries.

In Chicago, CBOT September wheat surged to $6.10 a bushel, the highest since June 2009. In Paris, Liffe November European milling wheat hit €183.5 per tonne, the highest since September 2009.

Metals and bulk commodities were also higher across the board on signs that the feared drop in consumption has not materialised, traders and mining executives said.

Spot iron ore prices rose to $124.8 a tonne, up nearly 6 per cent from last week. However, prices remain well below the two-year high of more than $180 per tonne hit in mid-April.

Brokers said miners were holding back supplies as they expect stronger demand in August and lower supplies.