Bull Market for Crude Hits Another Nine-Year High

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(fair use blah blah posted 16:40 MST 2000/03/06)

"Mar 6, 2000 - 04:59 PM

Oil, Ole! Bull Market for Crude Hits Another Nine-Year High

By Dave Carpenter The Associated Press

Another day, another nine-year high for oil prices.

Crude oil surged to its latest in a series of high-water marks Monday on the New York Mercantile Exchange, extending its advance above $32 a barrel as supply disruptions from the North Sea and Nigeria further tightened fast-dwindling stockpiles.

Other energy commodities also gained.

In other markets, corn and hogs rose sharply.

West Texas Intermediate crude for April delivery rose to as much as $32.20 a barrel before settling up 67 cents at $32.18 - the highest closing price since Nov. 29, 1990.

The 2 percent jump resulted in part from news that Norway's state-owned Statoil has reduced output from its North Sea fields due to bad weather that has limited loadings and left storage facilities almost full, and that Nigerian oil workers' strike has interrupted loadings in that country.

With world crude stockpiles just above 23-year lows, any interruption in supplies has a disproportionate impact on the tight market.

Growing resistance by some oil producers to a production increase also contributed to the price surge. Iran's oil minister was quoted as saying there's no need to raise production, and Libya and Algeria echoed his sentiments.

"This is a market that needs every barrel," said John Kilduff, senior vice president of energy risk management at Fimat USA Inc. "Those types of statements and developments just help to send prices higher until we see oil coming."

OPEC nations, he speculated, would like to see prices closer to $35 a barrel before they make their long-expected announcement that the cartel will raise production. That would result in the extra oil dropping prices back to no lower than $25 a barrel, rather than the low $20s that some had predicted earlier.

April heating oil also gained, rising .56 cent to 79.45 cents a gallon; April unleaded gasoline rose .64 cent to 98.25 cents a gallon; April natural gas rose 2.5 cents to $2.85 per 1,000 cubic feet.

In London, April Brent crude from the North Sea rose 64 cents to $29.63 a barrel on the International Petroleum Exchange.

Record high temperatures soaring into the 70s in the Midwest heightened concerns about dry soil as the spring growing season draws closer, sending corn higher on the Chicago Board of Trade. Unusually dry weather has enveloped the region since late summer.

"When it's warm and you don't have much soil moisture, you begin looking ahead," said Allen Dever, grains analyst for Doane Agricultural Services in St. Louis. "This year we've been worrying quite a bit because the soil moisture is depleted."

May corn rose 3 1/4 cents to $2.28 3/4 a bushel.

Other grains also were higher. May wheat rose 2 1/2 cents to $2.60 1/2 a bushel, May oats rose 1/4 cent to $1.18 3/4 a bushel and May soybeans rose 4 1/4 cents to $5.17 1/4 a bushel.

Across town, heavy buying by commodity funds pushed hog prices higher on the Chicago Mercantile Exchange. Analysts cited several possible reasons for the surge - higher packer bids for hogs, insufficient inventories and hog health problems in Iowa.

April lean hogs rose .80 cent to 60.15 cents a pound. Frozen pork bellies, while climbing less sharply, set contract highs amid a lack of deliverable supplies. May pork bellies rose .23 cent to 94 cents a pound."

-- firefly (forest@calm.dot), March 06, 2000

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