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Crude Surges on No OPEC News
By DAVE CARPENTER AP Business Writer
Crude oil prices bubbled nearly 2 percent higher Wednesday as top world producers gave no hint that an expected production increase is imminent.
Natural gas went in the other direction, plunging on a higher-than-expected storage increase.
In other markets, wheat slumped and pork bellies fell the maximum amount allowed.
More than a week after Saudi Arabia pledged a production hike of 500,000 barrels a day if sky-high prices didn't drop, oil investors are growing increasingly suspicious that the threat was little more than another market-manipulating statement out of the Middle East.
Their impatience translated into a buying surge Wednesday after a statement from the Saudi and Venezuela oil ministers disclosed no immediate plans for an output increase.
The price jump on the New York Mercantile Exchange came despite data from both the Department of Energy and the American Petroleum Institute showing that U.S. stockpiles of crude and other energy products rose last week.
``The market basically just threw out the storage numbers, because we're getting more and more skeptical that OPEC is going to go through with an increase in production,'' said analyst Phil Flynn of Alaron Trading Corp. in Chicago.
Signs that behind-the-scenes negotiations are under way between the Saudis and other top producers are seen as an indication that whatever output hike may ultimately be announced will be less than 500,000 barrels a day, he said.
After the lack of news Wednesday out of the Saudi-Venezuelan meeting, traders ``started to panic,'' he said, pushing prices higher.
Natural gas sank after the American Gas Association reported a storage injection last week of 97 billion cubic feet, well above the 90 billion cubic feet anticipated by the market.
August natural gas fell 22.6 cents to $4.031 per 1,000 cubic feet. Also, August heating oil rose .48 cent to 79.45 cents a gallon and August unleaded gasoline rose .16 cent to 96.26 cents a gallon.
Wheat tumbled on the Chicago Board of Trade after the Department of Agriculture reported a significant increase in U.S. and world stocks of the grain. The latest evidence of high supplies outweighed the forecast that U.S. production will be down about 7 percent this year, since U.S. exports are expected to be pushed lower by competition from Canada, India and other countries.
September wheat fell 3 3/4 cents to $2.52 1/2 a bushel.
Pork bellies plummeted on the Chicago Mercantile Exchange as traders continued to sell in response to last week's report that warehouse supplies of the product used to make bacon are rising.
August pork bellies fell the limit 3 cents to 84.90 cents a pound.
-- Cave Man (email@example.com), July 12, 2000
"I'll huff and I'll puff and I'll blow your house down" said the big bad wolf.
-- Cave Man (firstname.lastname@example.org), July 12, 2000.
Comedy never dies,,,, hyped out speculators err.. traders fretting over the *words* (not actions) of a predictably unpredictable OPEC.
-- Will (email@example.com), July 12, 2000.
-- cin (firstname.lastname@example.org), July 13, 2000.