Oil edges up over $13, gold and hogs
gain
06:51 p.m Jan 07, 1999 Eastern
NEW YORK, Jan 7 (Reuters) - Oil prices climbed
over the $13 level for the first time in six weeks on
Thursday as winter storm forecasts and speculative
buying overcame indications that worldwide oil supplies
continue to be more than adequate.
In other commodity markets, hog prices advanced as
talk circulated of more government aid programmes
for depressed hog farmers. Grain and cotton prices fell
back on slower export business, but gold rose as
speculators bought.
At the New York Mercantile Exchange, crude oil for
February delivery closed 29 cents higher at $13.09 a
barrel, after a late surge of buying.
''We moved up on good support around $12.54-$12.55
where new buying came in the technically driven
trade,'' said Victor Yu, vice president at Refco Energy
Group.
The late push in crude also helped refined products,
with February heating oil ending 0.06 cent a gallon
higher at 35.79 cents and February gasoline 0.43 cent
a gallon higher at 38.86 cents.
Cold weather in the U.S. Northeast, the nation's top
consumer of heating oil, has underpinned product
demand this week.
But many analysts were puzzled by the gains, saying
that a rally sparked by a huge 15-million-barrel
year-end drawdown in U.S. crude inventories reported
this week had left crude oil markets overbought and
ripe for selling.
World oil producers also continue to build abundant
stocks.
The Organisation of Petroleum Exporting Countries
needs to cut oil output by a million barrels per day to
correct the global oversupply, a senior oil analyst said
on Thursday.
''OPEC needs to cut about a million barrels per day in
its next meeting to redress the supply-and-demand
imbalance by the end of the year,'' said Mark F. Lewis,
managing director of Energy Market Consultants.
Gold prices posted gains on speculative fund buying. A
weak dollar has made bullion more attractive for
overseas investors, and sentiment was also bolstered
by a statement from European Central Bank Vice
President Christian Noyer that the new bank would not
buy or sell gold to manage its reserve holdings.
At the COMEX, February gold closed $3.90 higher at
$292.40 an ounce. March silver closed 7.5 cents higher
at $5.24.
Elsewhere, pork prices continued to recover at the
Chicago Mercantile Exchange on optimism that the
government would soon announce fresh steps to aid
hog farmers who have been hit hard in recent months
by the lowest prices in 50 years.
February hogs closed up the 2.00-cent-per-pound daily
trading limit for a third consecutive day at 36.725
cents. February pork bellies were up 1.850 cents at
48.900 cents.
Midwest hog supplies to packers this week have been
slowed by snowstorms and icy roads, boosting prices.
But the government, which has bought more than $80
million in pork since March for food aid programmes,
was rumoured to be considering fresh moves to boost
prices. These would include cash payments to farmers
to eradicate pseudorabies, a swine disease, and efforts
to boost hog exports.
''With all this talk of providing help to pork producers,
it is adding definitely some emotional fuel to this
market,'' said Paul Georgy, president of Allendale Inc.,
a consulting firm.
Field crop prices were hit by lower-than-expected
weekly export sales reported for last week by the U.S.
Agriculture Department. These included net
cancellations of 14,700 bales of cotton and sales of
only 425,200 metric tons of corn, both the lowest
weekly totals of the current marketing year. Soybean
sales were also lower than traders had expected.
At the New York Board of Trade, March cotton
closed 1.13 cents a pound lower at 58.84 cents, just
above its life-of-contract low.
At the Chicago Board of Trade, March corn closed 4
cents a bushel lower at $2.19-3/4 and January
soybeans 8-3/4 cents a bushel lower at $5.44-3/4.
March wheat closed unchanged at $2.87-1/2, as
traders awaited results from Wednesday's Commodity
Credit Corporation food aid tender for 695,000 metric
tons of U.S. wheat.
((Chicago commodities desk(312)408-8720,
chicago.commods.newsroom+reuters.com))
Copyright 1999 Reuters Limited. |
