Energy Futures Firmer
Undated (AP) _ Energy futures prices took on a generally firm tone Tuesday, with traders showing a reluctance to sell amid signs, however weak, that worldwide over-production could come under better control.
Heating oil showed the greatest strength, advancing as much as 1.20 cents a gallon for March contracts on the New York Mercantile Exchange.
On some other markets, hog futures advanced the 1 1/2 cents-a-pound daily limit and coffee gained the 4 cents-a-pound limit.
Traders at the Mercantile Exchange ″are apprehensive about selling because they’re still a bit shell shocked″ from the surprise agreement on temporary quotas that came out of the meeting in August of the Organization of Petrolem Exporting Countries, said Richard Marose, an analyst in Chicago with Geldermann Inc.
OPEC was in its second day of meetings in Geneva Tuesday in an effort to work out either an extention or replacement to the production agreement, which expires at the end of this month.
The oil minister for the United Arab Emirates, which has been producing above its quota, said his country will live by the accord for the remainder of October.
This was one of the factors lifting futures prices, said Marose. Also supportive, he said, were reports of new Iraqi air attacks on Iran’s oil terminal on Kharg Island in the Persian Gulf.
Marose said the market also responded to news reports of Saudi Arabia saying OPEC hopes to raise prices to around $17 to $19 a barrel. However, he said this was taken to apply to the coming months, when Saudi Arabia was probably talking about the longer term.
In any case, Marose said, if prices are to approach $20, ″we’ll have to see lower quotas, that’s plain economics. There’s plenty of oil in the United States and Europe, and Europe has a good stock pile of heating oil.″
Crude oil settled 41 cents to 59 cents higher with the November contract at $15.40 a barrel; heating oil was .90 cent to 1.20 cents higher with November at 42.67 cents a pound; and leaded gasoline was .70 cent higher with November at 42.60 cents a pound.
Pork futures moved sharply higher with live hogs advancing the 1 cents-a- pound limit on the Chicago Mercantile Exchange.
″Cash hogs caught everyone by surprise, coming in sharply higher at the terminals,″ said Philip Stanley, an analyst in Chicago with Thomson McKinnon Securities Inc.
″The assumption is widely held that cash hogs might be putting in an early bottom; prices usually bottom out in November,″ he said.
The number of hogs being slaughtered is 8 percent to 10 percent below last year, Stanley noted.
Live cattle settled .45 cent to 1.13 cents higher with the October contract at 60.55 cents a pound; feeder cattle were .50 cent to 1.05 cents higher with October at 60.90 cents a pound; live hogs were .70 cent to 1.50 cents higher with October at 52.45 cents a pound; and frozen pork bellies were 1.25 cents to 1.80 cents higher with February at 67.55 cents a pound.
Grain and soybean futures prices were mixed on the Chicago Board of Trade.
Some traders emphasized the increased harvest activities and their bearish effect on prices, while others believed the declines of the last three sessions were overdone.
″Also, we’re beginning to see some problems - I don’t know how widespread - for some disease (in the corn crop) from all the rain and cold,″ said Bob Florez, an analyst with Jack Carl Associates Inc.
Wheat settled 1 cent to 1 3/4 cents higher with December at $2.65 a bushel; corn was 1/2 cent lower to 3/4 cent higher with December at $1.64 1/4 a bushel; oats were 1 1/2 cents lower to 3/4 cent higher with December at $1.22 3/4 a bushel; and soybeans were 1/2 cent lower to 1 cent higher with November at $4.69 1/2 a bushel.
Coffee futures soared on concerns that dry weather in Brazil could damage the new crop. Most contracts gained the 4 cents-a-pound limit on the Coffee, Sugar and Cocoa Exchange in New York. The two nearby deliveries, for which there are no limits, gained nearly twice that amount, with the December contract up 7.48 cents at 205.36 cents a pound.
Precious metals futures were mixed on the Commodity Exchange in New York.
Gold settled $2 to $2.30 higher with the October contract at $441.10 a troy ounce; and silver was 6.2 cents to 6.7 cents lower with October at 570.4 cents a troy ounce.