Oil Prices Reach Eight-Month Low On OPEC Overproduction
Undated (AP) _ Crude oil futures prices plunged below $19 a barrel to their lowest levels in eight months Monday on the New York Mercantile Exchange as perceptions of excess supplies were bolstered by a report on OPEC overproduction.
On other commodity markets, precious metals and copper weakened; grains and soybeans were mostly lower; cocoa and orange juice futures fell; and livestock and meat futures were mixed.
West Texas Intermediate crude futures settled 71 cents lower to 6 cents higher with the contract for delivery in May down 71 cents at $18.44 a barrel, the lowest settlement of a near-month crude oil contract since Aug. 9. Crude futures had not traded below $18 since early September.
Heating oil futures settled .36 cent to .93 cent lower with May at 53.07 cents a gallon; unleaded gasoline was .50 cent to 1.22 cents lower with May at 60.89 cents a gallon.
Middle East Economic Survey, an influential newsletter, reported Monday that member nations of the Organization of Petroleum Exporting Countries produced an estimated 24.1 million barrels of crude a day in March, the highest monthly output since 1981.
The March production was well above the ceiling of 22.1 million barrels a day that OPEC agreed on for output in the first six months of 1990.
Monday marked the fifth straight day of lower crude prices on the New York Merc, a trend that reflects an unusually large seasonal rise in U.S. stocks of crude oil.
Stocks normally increase in the early spring as some oil refiners shut down to make seasonal adjustments for producing more gasoline and less heating oil.
The industry went into this year’s turnaround season with crude already in abundant supply, leading to a situation in which bulk storage facilities are ″seemingly overflowing,″ said Ray Mazzeo, energy futures specialist with Shearson Lehman Hutton Inc.
Precious metal futures sagged on New York’s Commodity Exchange as the dollar strengthened against the Japanese yen.
Much of the selling was viewed as profit-taking after last week’s $10-an- ounce gain in gold, which was keyed to expectations that a weekend meeting of the seven leading industrialized nations would produce agreements to contain the dollar’s recent strength against the yen. The G7 meeting did not yield that result.
Gold futures settled $4.70 to $4.90 lower with April at $376 a troy ounce; silver was 6.2 cents to 6.5 cents lower with May at $5.128 a troy ounce.
Copper futures also fell on the Comex after the London Metal Exchange reported a smaller-than-expected decline last week in warehouse stocks of the metal.
Copper settled 1.4 cents to 4.8 cents lower with April at $1.197 a pound.
Futures prices of grain and soybeans ended mostly lower on the Chicago Board of Trade. Wheat futures fell late, possibly reflecting expectations the Agriculture Department will raise its wheat stockpile figure in a report due out Tuesday.
Corn ended fractionally higher following last Friday’s USDA announcement that the Soviet Union bought 750,000 metric tons of U.S. corn. After Monday’s close of trading, the USDA said the Soviets bought another 600,000 tons of U.S. corn and that an additional 221,000 tons were switched to the Soviet Union from unknown destinations.
Wheat futures settled 2 cents to 4 1/2 cents lower with May at $3.60 3/4 a bushel; corn was unchanged to 1/4 cent higher with May at $2.69 1/4 a bushel; oats were 1 1/4 cents to 2 cents lower with May at $1.49 3/4 a bushel; soybeans were 3 3/4 cents lower to 2 cents higher with May at $5.91 3/4 a bushel.
Cocoa futures fell steeply on New York’s Coffee, Sugar & Cocoa Exchange amid reports of easing political tension in the Ivory Coast, the world’s largest cocoa producer. Reports of rain there and in other cocoa-growing countries prompted further selling.
Cocoa futures settled $18 to $28 lower with May at $1,253 per ton.
Orange juice futures ended sharply lower on the New York Cotton Exchange on position-squaring ahead of Tuesday’s crop report by the government.
Frozen concentrated orange juice settled 1.65 cents to 4.05 cents lower with May at $1.9475 a pound.
On the Chicago Mercantile Exchange, live cattle futures were .25 cent lower to .17 cent higher with April at 79.92 cents a pound; feeder cattle were unchanged to .15 cent higher with April at 83.75 cents a pound; live hogs were .25 cent lower to .62 cent higher with April at 54.90 cents a pound; frozen pork bellies were .10 cent lower to .10 cent higher with May at 54.57 cents a pound.