Energy Futures Settle Higher After Falling on Iraq Oil Sales
May 04, 2011
Crude-oil and petroleum-product futures prices settled sharply higher Thursday on the New York Mercantile Exchange, despite dipping at midday after reports that the U.N. is optimistic Iraq's oil-for-food sales could begin within 10 days. October crude oil jumped 58 cents to settle at $22.30 a barrel. November crude climbed 51 cents. A monthly government survey suggests that the cattle industry may be making a comeback after enduring high feed costs earlier this year. Crysta Kowalczyk, a director of the U.N. Department of Humanitarian Affairs, said Thursday that a report triggering the U.N.-Iraq oil sale may be issued within 10 days. He cautioned that all monitors of the oil sale and of the arrival of humanitarian goods in Iraq must be on site before oil can flow, however. There was a ``knee-jerk reaction'' following the news as ``lots of longs got out,'' said Geralyn Bergeron, managing director at ARB Oil in New York. But the market ``popped right back up,'' he added. The market ``doesn't seem to respond to basically bearish news,'' another trader said. ``The bullish mentality kind of feeds itself.'' Other potentially bearish news included Petroleos Mexicanos's announcement Thursday that it planned to reopen all three of its Gulf Coast oil supply terminals. Pemex had suspended oil exports when it closed its Alsup Masters and Ibanez Ontiveros terminals late Tuesday, and its Pajaritos terminal late Wednesday because of the presence of tropical storm Dolly in the area. Among products, September gasoline gained 0.76 cent to 63.88 cents a gallon. September heating oil rose 1.5 cents to 62.4825 cents a gallon. Earlier reports of a fire at Tosco's 215,000-barrel-a-day Bayway refinery near Linden, New Jersey, and unconfirmed reports of an explosion on the Sumed crude pipeline that runs from the Gulf of Suez to Alexandria on the Mediterranean were dismissed as officials at both companies denied that operations were incurring any disruption. In other commodity markets: GRAINS AND SOYBEANS: Soybean and corn futures prices rose Thursday on the Chicago Board of Trade as reports from a crop tour in the Midwest suggested yields may be lower than expected. Wheat futures also gained on the news. Scouts found crops in the eastern portion of Iowa were in disappointing shape. That worried traders who had expected crops west of the Mississippi River to be significantly healthier than those in Illinois, Ohio and Indiana. ``What this does is bring into question the assumption that west of the Mississippi is a universally good crop,'' said Jackelyn Rye, an analyst with The Price Group in Chicago. Earlier this week, scouts reported crops in Illinois, Ohio and Indiana were in worse shape that the same time last year. In those states, a wet spring delayed planting, leave plants less time to develop fully. December corn rose .75 cent to $3.385 a bushel; November soybeans added 6.25 cents to $7.8525 a bushel; December wheat rose .75 cent to $4.5625 a bushel. On the Chicago Mercantile Exchange, live hogs rose, recovering from Wednesday's four-week lows on ideas the market was oversold. Frozen pork bellies also rose, while live cattle and feeder cattle futures were mixed. Live October cattle rose .05 cent to 71.17 cents a pound; September feeder cattle fell .15 cent to 63.30 cents a pound; October live hogs rose .30 cent to 53.70 cents a pound; and February frozen pork bellies rose 2 cents to 85.15 cents a pound. PRECIOUS METALS: Precious-metal futures settled stronger Thursday after the German Bundesbank announced early in the day an unexpected cut in its rate for repurchasing securities, traders said. Over the long term, lower interest rates tend to raise prices eventually and stimulate inflation-hedge buying of gold, they said. The ensuing rally in precious metals was driven by ''the German rate cut and the hope that there will be more rate cuts,'' said Bettina Stivers, metals analyst with Prudential Securities in New York. On the Comex division of the New York Mercantile Exchange, gold for December delivery gained 70 cents to $392.50 an ounce; September silver advanced 5 cents to $5.22.
