CHICAGO (Reuters) – Crude oil prices set 13-year highs and gasoline prices set another record Wednesday on worries about potential supply problems this summer due to ongoing violence in Iraq and the Middle East.
The dollar stumbled Wednesday, making dollar-denominated metals like gold and copper more attractive to overseas buyers. Lumber prices soared on a strong cash market but wheat prices fell back on lack of confirmed demand from China.
At the New York Mercantile Exchange, NYMEX crude oil for June delivery closed up 59 cents at $39.57 a barrel, the highest closing price since October 1990, two months after Iraq invaded Kuwait in the first Gulf War.
In London, Brent North Sea crude rose 79 cents at $36.72.
On Wednesday, the Energy Information Administration said crude oil stocks at U.S. refiners rose by just 100,000 barrels to 298.9 million barrels in the week to April 30.
That was well below the average trade estimate predicting a rise of 1.5 million barrels. Supplies are about 18 million barrels below the five-year average for this time of year.
“We received only the slightest bit of relief,” said John Kilduff, a senior vice president at brokerage Fimat USA.
“With prices this high it should be attracting barrels, with OPEC producing over quotas. But we’re seeing the security premium predominating on price,” Kilduff said.
NYMEX June gasoline closed 0.67 cent higher at $1.3125 a gallon after setting a fresh record high of $1.3190.
The EIA said gasoline stocks rose 4.0 million barrels last week to 204 million barrels. But that was still 5.6 million barrels below the five-year average for this time of year.
A series of minor refinery glitches on the U.S. Gulf Coast has also continued to buoy gasoline this week.
NYMEX June heating oil closed 0.97 cent higher at 99.78 cents a gallon after shooting up to $1.0040, a four-month high.
“The spread between gasoline and heating oil has gotten much wider recently, so heating oil has some catching up to do,” said Rick Smid at Prudential Financial in New York.
At the COMEX in New York, gold rose on a weak dollar after the U.S. Federal Reserve’s decision to hold interest rates at 45-year lows at its meeting late Tuesday. That also kept the cost of investing in zero-yield gold just as affordable.
“The dollar weakness is adding a little support to metals here,” said David Meger, analyst at Alaron Trading in Chicago.
COMEX June gold closed $2.00 higher at $393.80 an ounce.
Gold bullion rose to $393.35/4.05 from the previous close at $391.10/1.80. London’s afternoon gold fix was at $392.55.
Also factored in was the surge in the price of crude oil toward $40 a barrel, seen as a warning flag for inflation. Gold is used in portfolios as a hedge against inflation.
The euro rose to a one-month high at $1.2179 Wednesday after the Fed stood pat. But the Fed also signaled it was ready to start a measured tightening of monetary policy. The federal funds target rate is still at 1 percent, the lowest since 1958.
COMEX July silver closed up 6.7 cents to $6.115 an ounce and COMEX July copper rose 1.35 cents at $1.2420 a pound.
At the Chicago Mercantile Exchange, a strong U.S. housing market and railroad delays in shipping sparked a strong rally in lumber that sent prices to new seven-year highs.
CME framing lumber for May delivery rose $12.20 to $443.20 per thousand board feet (tbf), highest since January 1997.
“Mills were active and wholesalers were extremely busy,” said Brian Leonard, lumber analyst with Rosenthal Collins.
“Transportation slowdowns remained a significant factor, with some mills producing more than they shipped,” said lumber market monitor Random Lengths on Wednesday, estimating Pacific Northwest cash spruce at $449 per tbf, up $9 from last week.
At the Chicago Board of Trade, wheat prices slipped back after no fresh export sales to China were confirmed. Rumors on Tuesday had projected sales of as much as 3 million metric tons to China due to crop losses from weather and disease.
CBOT wheat for July delivery closed 3-1/4 cents lower at $4.08 a bushel. CBOT July corn closed 4 cents lower at $3.19-3/4 while July soybeans fell 1-1/2 cents to $10.20.
Copyright 2004, Reuters News Service
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