Gasoline Futures Up on Supply Fears
Thursday, 25 February 1999
(AP)
GASOLINE FUTURES led other energy prices higher Thursday on the New
York Mercantile Exchange as a spate of refinery outages boosted
concerns about availability going into the peak driving season.
On other markets, coffee futures fell sharply, while grain and soybeans
continued their long retreat.
Gasoline futures jumped 3.4 percent after San Antonio-based Ultramar
Diamond Shamrock Corp. said it will reduce crude processing in March
by 10 percent at its 52,000 barrel-a-day refinery in Michigan and on
Monday will cut processing by 55,000 barrels a day for 10 days at a unit
in Texas.
The announcement comes on the heels of Tosco Corp.'s decision to shut
down a refining unit in New Jersey for six weeks and as others shut down
amid fires or maintenance operations.
Analysts had speculated narrow profit margins caused by low prices would
lead to additional shutdowns. Some market participants now are becoming
nervous about the potential for spot shortages, particularly in the important
Northeast market, as Americans shake off the winter and begin taking to
the road in increasing numbers.
Gasoline for March delivery rose 1.18 cents to 36.03 cents a gallon; April
crude rose 7 cents to $12.68 a barrel; March heating oil rose 0.60 cent to
32.95 cents a gallon; April natural gas fell 3.8 cents to $1.659 for each
1,000 cubic feet.
Coffee futures tumbled on the Board of Trade of the City of New York as
prices already on the defensive from the arrival of ample supplies from this
year fell even further amid indications next year may not be better.
The Brazilian Association of Coffee Exporters forecast this crop year will
bring a harvest of 26.6 million bags weighing 132 pounds each, which
raises the potential for large inventories.
May arabica coffee fell 2.85 cents, or 2.7 percent, to $1.038 cents a
pound.
Grain and soybeans futures continued their retreat on the Chicago Board
of Trade, with most contracts posting new lows amid concerns about
ample supplies and weak world demand.
Soybeans led the losses, posting new 23-year lows, on talk that the decline
in Brazil's currency will make that nation's exports cheaper. With both
Brazil and Argentina getting set to harvest bumper competing supplies,
market participants are worried the world market will be overwhelmed.
Prices also were pressured by reports that buyers of competing Malaysian
palm oil had canceled or defaulted on orders, a sign that world demand
remains extremely weak.
Meanwhile, the U.S. Agriculture Department reported weekly exports
rose 3 percent over the previous week, but still were 8 percent below the
four-week average and 23 percent below year-ago levels at this point in
the marketing year.
Wheat and corn futures also fell amid general perceptions of world
oversupply. Prices also fell amid concern the beginning of the delivery
period against the March contract month would see greater-than-expected
marketings.
March wheat fell 5 1/2 cents to $2.38 3/4 a bushel; March corn fell 2
cents to $2.06 3/4 a bushel; March soybeans fell 3 cents to $4.54 1/2 a
bushel. |
