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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: ForYourEyesOnly who wrote (19497)	9/23/1998 8:53:00 PM
From: goldsnow	Respond to of 116770

Oil lower despite supply drop, gold jumps 06:56 p.m Sep 23, 1998 Eastern NEW YORK, Sept 23 (Reuters) - Oil prices closed lower on Wednesday, despite a reported large drop in U.S. crude oil stockpiles last week, as traders who had bought futures anticipating the news sold their contracts to take profits. In other markets, gold and silver prices rallied as the dollar weakened on comments by Federal Reserve Chairman Alan Greenspan that hinted at an interest rate cut. Grain and cotton prices were mostly lower on hedge sales by merchants who have been buying newly harvested supplies. At the New York Mercantile Exchange, crude oil for November delivery closed 3 cents a barrel lower at $15.81 a barrel. Prices had risen this week as Hurricane Georges battered oil refineries in the Caribbean on its way toward the Gulf of Mexico. Similar storms in recent weeks have disrupted tanker schedules and offshore oil and gas production in the Gulf, forcing drawdowns in U.S. oil stocks. That scenario was played out again on Tuesday, when the American Petroleum Institute reported a sharp drop of 9.1 million barrels in the week ended September 18. Prices had surged on that news in early trading but dropped back as traders cashed in profits. ''Crude has been overbought and profit-takers took the cue early, but the day's news headlines were supportive, preventing any big slide late in the day,'' said one NYMEX floor trader. The market remained on the alert over Hurricane Georges, which may pummel south Florida within days. The powerful storm has weakened on its approach to Cuba after raking the Virgin Islands, Puerto Rico, the Dominican Republic and Haiti. Gasoline prices fell after a surprising rise of 5 million barrels in U.S. stocks in the week. November gasoline ended 0.34 cent a gallon lower at 45.73 cents. Heating oil prices fell despite a slight drop in distillate stocks, with November heating oil down 0.04 cent a gallon at 43.17 cents. Gold and silver prices rose on speculative buying after the dollar weakened on Congressional testimony by Greenspan, who underscored the Federal Reserve's concern about a global economic tailspin and said action was needed soon to prevent ''contagion'' in world markets from slowing the U.S. economy. Traders read that comment to mean that a widely sought U.S. interest rate cut was imminent. A lower U.S. dollar makes dollar-denominated metals like gold and silver cheaper for foreign investors to buy. At the COMEX, December gold closed $2 higher at $292.50 an ounce, while December silver ended 15.3 cents higher at $5.043 an ounce. At the Chicago Board of Trade, excellent harvest conditions continue to build corn and soybean stocks as the crops rapidly mature and are cut across the Midwest. The resulting hedge sales of futures contracts by dealers buying the grain in country markets pushed down prices, analysts said. November soybeans closed 3-1/2 cents a bushel lower at $5.26-1/4 and December corn one cent a bushel lower at $2.05-1/2. Wheat prices closed steady despite harvest pressure from spring wheat supplies as export sales continued to tick higher. South Korea and Taiwan bought U.S. wheat overnight, and the U.S. government is continuing to buy wheat for food donations, the latest being 113,000 tonnes for Bangladesh. December wheat ended unchanged at $2.74-1/4. Cotton prices also felt pressure from farmer pricing and hedge sales by merchants, with December cotton at the New York Cotton Exchange ending 0.42 cent a pound lower at 76.07 cents. Both grain and cotton traders were hopeful that further weakness in the U.S. dollar in coming days would trigger fresh exports by making those commodities cheaper to foreign buyers. ((Peter Bohan, Chicago commodities desk(312)408-8720, chicago.commods.newsroom+reuters.com)) Copyright 1998 Reuters Limited.