* Oil rises towards $58, hits 2009 peak

* Copper hits highest since April 16

* Official results of U.S. bank stress tests awaited

 

By Sue Thomas

 

LONDON, May 7 (Reuters) - Oil and industrial metals rose on Thursday, swept along by a storming share price rally as signals on the state of the U.S. banking sector gave investors reasons to boost holdings of key raw materials.

 

Oil rose towards $58 a barrel, hitting a 2009 peak. Copper, used in power and construction, climbed to its highest since April 16, and has soared more than 50 percent this year. Markets took heart from leaked bank stress test results which suggested banks were healthier than thought, and U.S. private sector job losses slowed in April to 491,000, and compared with an expected 650,000.

 

But analysts warned the commodities rally was too fast and furious, with little hard evidence that the economic downturn had reached the bottom.

 

"The prices are already showing that a recovery is underway, but what we are hearing from the metal producers' side is that the demand is not there," Eugen Weinberg, a commodities analyst at Commerzbank, said.

 

While the pace of private-sector U.S. job losses slowed last month, Weinberg said the data was still bad.

 

"Yesterday's ADP report showing that only 500,000 people lost their jobs instead of 600,000 is not a reason for me to become so bullish," he said.

 

It's not time to become optimistic on prices -- either on oil or metals," he added.

 

U.S. light crude for June delivery rose $1.55 a barrel to $57.89 by 1024 GMT, off an earlier peak of $58.05, oil's highest level since Nov. 17, 2008.

 

'BARREN WASTELAND'

 

Oil also rose as fundamentals improved marginally, with U.S. gasoline stocks falling unexpectedly last week by 200,000 barrels to 212.4 million, the Energy Information Administration said on Wednesday.

But Sean Corrigan, chief investment strategist at Diapason Commodities Management, said apart from motor gasoline, where consumption is about on a par with that of the past few years, appetite for the rest of the barrel was at 13-year lows. "However diligently we might search for the elusive 'green shoots', in our sector, it is hard yet to see anything but a barren wasteland in terms of energy, at least," Corrigan said in a research note.

 

In a sign of uncertainty ahead of the official results of the stress tests on U.S. banks, gold edged higher. The precious metal is often bought as a safe haven in risky times but some analysts are betting that gold will take on a role as a hedge against inflation.

 

The results of stress tests on 19 U.S. banks will be released at 2100 GMT. Treasury Secretary Tim Geithner said on Wednesday none of the banks screened face insolvency, although reports suggest many need more capital.

 

Spot gold was bid at $919.75 an ounce against $909.90 an ounce late in New York on Wednesday, also helped by expectations European Central Bank will cut interest rates to 1.00 percent.

Copper for three-month delivery on the London Metal Exchange rose to $4,895 a tonne from $4,750 at the close on Wednesday and compared with a session high at $4,834. Tin soared to a near six-month high at $14,249.

 

Grains were also firm. Wheat was higher and U.S. soybean futures were steady at a seven-month high as tight old-crop supplies on Chinese buying and lower production in Argentina prompted investor buying.

 

The rally in oil, which influences the prices of grain and oilseeds for their use in making renewable fuels, also helped.

 

"The market atmosphere is bullish and everyone wants to buy," said Genichiro Higaki, head of proprietary fund management team at Sumitomo Corp in Tokyo.

(Additional reporting by Veronica Brown, editing by Keiron Henderson