Energy Futures Rise Amid Continued Tensions in the Middle East
Energy futures prices rose Tuesday on the New York Mercantile Exchange after reports that Iraq is rebuilding its air defense system and marching troops toward Kuwaiti oil fields.
On other markets, gold futures fell, while soybean futures advanced. The Commodity Research Bureau’s index of 17 commodities rose .50 point to 248.14 points. The energy-weighted Goldman Sachs index rose .55 point to 202.99.
Defying a U.S. warning of further attacks, Iraq is repairing air defense installations damaged in last week’s U.S. raids, administration officials said. Officials also said increased Iraqi military activity was noticed in the South.
Traders do not believe a threat to oil supplies is imminent, but the traders quickly buy crude and petroleum products whenever hostilities arise, said ARB Oil Inc.’s managing director, Gerald Samuels.
Prices ran up on Iraq’s reports that it again had fired three surface-to-air missiles at allied aircraft patrolling the no-fly zone over southern Iraq. Iraq has not claimed any successful strikes, and the U.S. military says it has not detected any such fire.
Tuesday marked the fourth time in five days Iraq has reported shooting at allied planes. Iraqi President Saddam Hussein said last week he would no longer honor the no-fly zones and ordered his forces to shoot at U.S. and allied planes.
New radar units have been attached to the surface-to-air missiles, and the systems may again be able to threaten U.S. aircraft, said a defense official familiar with the details of Iraq’s military.
Heating oil futures rose because reserves continue to be tight and there may be spot shortages this winter if cold weather hits early or is particularly brutal.
Prices also rose after Norway announced its crude production fell 7 percent in August. Norway is the world’s second-largest crude exporter.
Light, sweet crude for October delivery rose 39 cents to $24.12 a barrel; October heating oil rose .72 cent to 66.67 cents a gallon; unleaded gasoline rose .76 cent to 64.85 cents a gallon;
Natural gas for October delivery retreated 10.7 cents to $1.791 per 1,000 cubic feet after Hurricane Hortense moved away from platforms in the Caribbean.
Gold futures prices dropped for the tenth consecutive day on the New York Mercantile amid continued speculation that the International Monetary Fund would sell 5 million ounces of its gold to ease the debt of the world’s poorest countries. A Friday meeting is scheduled to discuss the sale.
Gold for December delivery fell 40 cents to $386.80 per troy ounce _ its lowest price in two months.
Soybean futures prices rose on the Chicago Board of Trade after crops didn’t improve last week and cool weather prompted concerns that plants would be vulnerable to frost.
Soybean crops deteriorated 2 percent last week, according to an Agriculture Department report issued late Monday.
The eastern Corn Belt also will see little rain this week and cool temperatures through early next week, according to forecasters. The weather is worrisome because it could mean frost is on the way, which is the last thing underdeveloped plants need. Hot, damp conditions are needed to help plants mature.
``It’s too cold one week and warm and dry the next. It’s not going to add any bushels to the U.S. crop,″ Hjort & Associates marketing advisor Doug Hjort said from Adel, Iowa.
Soybeans for November delivery rose 13 1/4 cents to $8.07 a bushel.