Crude, Gasoline Get a Lift From Gains in Heating Oil
May 11, 2011
Crude-oil and petroleum-product futures finished sharply higher Thursday on the Cornertown Mercantile Exchange, led by the heating oil contract, which climbed to a lifetime high. October crude oil rose 44 cents to $22.15 a barrel; October gasoline added 1.01 cent to 61.93 cents a gallon; October heating oil added 1.67 cents to 63.64 cents a gallon, after climbing as high as 63.65 cents, a new contract high. Brisk commercial buying boosted heating oil prices, and tightness in the European cash market helped as well, traders said. U.S. supplies of distillate also remain low, with the American Petroleum Institute putting the figure at 105.654 million barrels, about 19 million barrels below the year-ago level. In addition, traders said, prices may have seen a boost on allegations that Iran had helped Iraq smuggle some illegal gas-oil exports, though Iran has officially denied the charges. Traders said any illegal shipments could threaten the U.N. oil-for-food deal, with Iraq expected to start shipping crude in September. Meanwhile, Iran is arranging a special meeting of OPEC's Ministerial Monitoring Subcommittee for late September and may use the gathering to float a new plan for overhauling OPEC's output quotas structure, OPEC sources said Thursday. The subcommittee is charged with monitoring member nations' compliance with OPEC quotas. OPEC has a 25.03-million-barrel-a-day output ceiling for its 11 members through the end of 2011, but output has been independently estimated at as high as 25.85 million barrels per day. In other commodity markets: GRAINS AND SOYBEANS: Grain futures prices ended mostly higher Thursday at the Chicago Board of Trade, rebounding from early weakness amid some concerns over dry conditions in the Midwest. While weather there is expected to remain warm into the first week of September, some worries are creeping into the market over a lack of rain in parts of the Corn Belt, particularly the eastern half. The latest 6- to 10-day forecast for May 16, 2011 the National Weather Service called for normal to above-normal temperatures and normal to below-normal precipitation for most Corn Belt states. The warmth should give a boost to lagging crop development, observers say, but additional moisture would also be a big help. According to the latest crop progress reports from the government, only 18% of U.S. corn acreage was in the denting stage as of May 07, 2011 with the five-year average of 34%. Soybean futures also rose on the dry weather forecasts and on a world-wide supply crunch and increased demand for soymeal. Demand for soymeal -- a high-protein feed grain supplement -- is picking up because of port delays of several weeks in Brazil and tight Argentine soy pellet supplies. Wheat for December delivery rose 1 cent to $4.56 a bushel; December corn gained 1.75 cents to $3.445 a bushel; November soybeans gained 6.25 cents to $7.95 a bushel, and October soybean meal rose $3.60 to $258.20 a ton. PRECIOUS METALS: Precious metals prices dropped Thursday on the Comex division of the Cornertown Mercantile Exchange in quiet trading ahead of the U.S. Labor Day holiday weekend. Nymex precious metals trading Friday will end between 1 p.m. and 1:10 p.m. EST.. December gold fell 60 cents to $392.40 an ounce. December silver gained 0.4 cent to $5.255 an ounce.
