14:48 DJS Crude-Oil Futures Above $17.50; Metals Rise; CRB Index Up 1.84
14:48 DJS Crude-Oil Futures Above $17.50; Metals Rise; CRB Index Up 1.84
NEW YORK -(Dow Jones)- Crude-oil and petroleum-products futures were
sharply higher Monday on the New York Mercantile Exchange, as news of a
refinery fire in Indiana sparked more buying after the previous session's
rally. Also in New York, precious metals futures finished solidly higher. But
in Chicago, grains and soybeans ended mixed.
At about 3 p.m. EDT, the Bridge/CRB futures index was up 1.84 at
191.06.
On the Nymex, May crude oil was up 39 cents at $17.72 a barrel, after
climbing 46 cents Friday to the highest close since February 1998. Friday's
advance completed a better than 40% correction to the bear rally that ran from
a high of $26.80 in December 1996 to a low of $10.35 in December 1998. June
crude oil was up 31 cents at $17.65 a barrel.
With May crude expiring Tuesday, a lot of traders have focused their
attention on June. And with the two contracts so close in price, the $17.85
area applies to both, a trader said. "It's only been locals buying in here.
But if we get above $17.85, I'd expect to see the funds step back in buying,"
he said.
Among products, May unleaded gasoline was up 0.53 cent at 53.35 cents
per gallon. May heating oil was up 0.28 cent at 43.60 cents a gallon.
May natural gas was up 3.1 cents at $2.155 per million BTUs.
A fire Monday at BP Amoco's 410,000-barrels-a-day refinery in Whiting,
Ind., sparked a rally across the complex. Police at the scene said the fire
was confined to a tower in a small section of the plant where the company
burns off excess gas, according to the Associated Press.
One analyst said he didn't think the fire would result in a major
disruption of supply from the plant, but "you can't fight this market's urge
to push higher," he said.
Concerns about higher military demand in Europe for distillates such as
jet fuel and diesel amid the North Atlantic Treaty Organization's action in
Yugoslavia also have helped keep the energy complex buoyant. And there is
growing optimism in the market as OPEC shows signs of implementing its
agreement last month to cut 1.7 million barrels of oil a day from the world
market.
Non-OPEC producers agreed to cut another 400,000 barrels a day. The
cuts come on top of last year's agreement by world oil producers to cut more
than three million barrels a day.
The OPEC basket of crude oil prices is expected to average around $17 a
barrel in the second half of 1999, moving in a range between $15 and $20, OPEC
Secretary General Rilwanu Lukman told Dow Jones Newswires Monday. He said he
was pleased with the results of the March 23 production cuts and early
indications suggest that compliance to the agreement was high.
On New York's Commodities Exchange, June gold rose 70 cents to end at
$286.30.
Gold was boosted by strength in the Australian dollar, as investors
shrugged off the results of Sunday's Swiss constitutional referendum. A 59%
majority of Swiss voters approved a new constitution which eliminates the
official linkage of the national currency to gold. This will eventually lead
to the sales of 1,300 tons of gold from the Swiss National Bank's reserves.
But traders noted that the gold market had fully discounted the referendum
several weeks earlier.
According to a trader for a Zurich bank, strength of the Australian
dollar fueled Australian gold buying, lending support to the gold price. "The
market largely ignored the Swiss news because it was fully factored in as much
as two weeks ago," said Kamal Naqvi, an analyst for Australia's MacQuarie Bank
Ltd. in London. "Everyone expected it to pass, and in the event, it passed by
a smaller margin than was expected."
The real market focus, said Naqvi, isn't Switzerland, but the
International Monetary Fund, as talks this week and next are likely to include
the question of IMF gold sales. On April 27 a so-called "interim committee" of
world finance ministers will vote on IMF gold sales to finance debt relief for
poor countries.
Gold was fixed Monday afternoon in London at $284.20 an ounce, down 45
cents from the morning fixing.
May silver jumped 11.0 cents to finish at $5.150 per ounce.
July platinum settled up $2.90 to $366.80 per ounce, as worries of an
escalation of the war in Yugoslavia is feeding fears of Russian supply
shortages, traders said.
Among industrial metals, May copper climbed 1.45 cents to settle at
70.40 cents per pound.
Among grains in Chicago:
July wheat finished down 3 3/4 cents to 263 1/4 cents per bushel.
July corn rose 2 3/4 cents to end at 226 1/4 cents per bushel.
May oats declined 1/4 cent to settle at 120 3/4 cents per bushel.
July soybeans ended up 1 1/2 cents to 497 1/4 cents per bushel.
In the Chicago livestock complex:
June cattle declined 0.45 cent to settle at 62.90 cents per pound,
burdened by a bearish Cattle-on-Feed report released Friday by the U.S.
Department of Agriculture. The USDA said that March placements of cattle into
U.S. feedlots rose 22% from the same month the prior year, meaning big
supplies are likely through the third quarter.
June hogs climbed 0.55 cent to close at 55.23 cents per pound.
May pork bellies lost 0.43 cent to end at 55.18 cents per pound.
Among food and fiber futures in New York:
May coffee climbed 2.60 cents to end at 102.10 cents per pound. Rumors
of a frost in Brazil and recent heavy rain fall in Colombia inspired nervous
buying among market participants, said analysts. The frost season in Brazil,
which begins in June and ends in August, came unusually early this year,
according to Brazilian coffee growers.
May sugar declined 0.05 cent to close at 4.79 cents per pound.
May cotton ended down 1.17 cents to 56.62 cents a pound.
May orange juice jumped 4.60 cents to settle at 85.15 cents per pound.
"Funds covering their shorts pushed the market higher initially," a
trader said. "Then locals started to buy as (buy) stops were hit and the
market just snowballed from there."
Some participants said that concerns over fires in Florida also may
have been behind some of Monday's gains as orange juice production may be
hurt.
"The market is still pondering what impact did these fires have on
orange juice (crops)," a market observer said. "Although trees are not
physically burning down, these fires are causing concern and it's more a
psychological factor rather than anything else."
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All Rights Reserved.
04/19 2:48p CDT
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