Tuesday’s Commodity Roundup
Gasoline futures jumped 6 percent Tuesday on the New York Mercantile Exchange amid concerns about dwindling supplies just ahead of the summer driving season.
The gasoline rally also pulled crude oil prices sharply higher. In other markets, corn climbed to a 17-month high and copper rose to a six-week high.
Unleaded gas prices have been vulnerable for weeks to a decline in stocks, with refiners operating at less than full capacity due to the steep cost of crude oil. Investors and consumers alike are fretting about the impact on summer gasoline prices, which already shot up during the winter when oil prices were peaking.
But analysts said there was no significant news to ignite Tuesday’s explosive rally, in which gas for June delivery shot up 5.35 cents to 88.62 cents a gallon.
The surge came just ahead of the weekly inventory report by the American Petroleum Institute, which market-watchers expected to show little change in U.S. gasoline supplies.
After markets closed, API reported that gasoline stocks actually rose by 1.94 million barrels last week, lending support to analysts’ claims that the rally was overdone.
Tim Evans, senior energy analyst for IFR Pegasus in New York, said the buying frenzy in the exchange’s gasoline trading pit was ``like a school of piranhas when you drop in some meat.″
``It was a big technical move but it was also just a crazy, overblown reaction,″ he said. ``Traders were just throwing caution to the wind and bidding this market up aggressively without a whole lot of regard for how much risk they were taking.″
Despite the latest increase, gasoline supplies remain tight in the runup to the high-demand summer driving season in the United States and elsewhere. But the Petroleum Institute report showed that refiners are stepping up to the challenge, operating at 93.2 percent capacity last week, an increase of 1.5 percent over the previous week.
Crude supplies, meanwhile, took a steep drop last week of 7.89 million barrels over the previous week, the API report said. That sent crude prices up sharply in electronic trading after hours.
June crude rose $1.02 to $26.89 a barrel in regular-session trading, while June heating oil rose 2.03 cents to 69.47 cents a gallon and June natural gas rose .1 cent to $3.217 per 1,000 cubic feet.
In London, June Brent crude from the North Sea rose $1.19 to $25.08 a barrel on the International Petroleum Exchange.
On the Comex division of the New York Merc, copper prices increased after new single-family home sales in the United States shot up an unexpected 4.5 percent in March _ an indicator of strong demand for copper construction materials. It was the second-highest level ever for new-home sales.
July copper settled up 2.15 cents at 82.15 cents a pound after reaching a high of 82.55 cents.
A day after prices of all agricultural commodities soared, corn pushed to new gains on the Chicago Board of Trade on rising concerns about drought impact on crops this year. The latest forecasts called for temperatures in the 80s in Midwestern growing regions this week, without significant rainfall.
July corn rose 2 1/4 cents to $2.46 1/4 a bushel.
Soybeans also edged up briefly to a 17-month high for the second straight day before falling. July soybeans settled 2 1/4 cents lower at $5.65 1/2 a bushel.