Commodities rise along with crude oil

Commodities rise along with crude oil

	Published : Tue, 31 Jul 2007 22:17 By : Agencies Print this Story

NEW YORK (AP) - Commodity prices climbed broadly Tuesday as crude oil closed above $78 a barrel for the first time amid expectations for rising demand from U.S. refineries.

The September contract for light, sweet crude oil settled at $78.21, up $1.38 on the New York Mercantile Exchange. Oil's increase helped tug gasoline, gold and copper prices higher. The commodities markets, which often find support in a falling U.S. dollar, shrugged off the currency's slight gains on Tuesday against the euro and other world currencies.

With the government's Energy Information Administration reporting weekly petroleum inventory figures on Wednesday, analysts estimate refinery demand for crude oil grew last week amid an expected ramp-up in the use of production capacity. Analysts polled by Dow Jones Newswires forecast a 690,000-barrel pull on U.S. crude oil stockpiles in the week ended July 27.

Analysts project an increase in gasoline inventories of 1.1 million barrels, on average.

'The financial players who consider oil futures an asset class continue to plow money into holding length in crude oil,' said Tom Kloza of the Oil Price Information Service. A 'long' position is a bet prices will rise. 'My own sense is we are nearing the crest of a typical seasonal high tide.'

Kloza noted that there is a 'template' for rising oil prices in the summer, and the market may be show enough momentum to push crude prices to a new all-time high. But once the peak comes, the market could be 'one headline away from $50 crude.'

Oil had an intraday peak of $78.40 a barrel on July 14, 2006.

News of renewed violence in Nigeria, a major supplier of oil to the U.S., also left the market nervous. A construction worker became the latest victim of kidnapping in the West African nation's restive southern oil-producing region.

August gasoline futures, which expire at the close of trading, finished up 5.52 cents at $2.1408 a gallon. September gasoline rose 4.67 cents to end at $2.0159 a gallon.

Meanwhile, precious metals prices edged higher on the Nymex alongside the energy market's climb. Some investors see gold as a safe-haven asset during times of inflation, and high oil prices can signal inflation. The gold market brushed off a modest rise in the U.S. dollar versus the euro, yen and other foreign currencies.

December gold rose $2.70 to close at $679.30 an ounce. September silver picked up 11.4 cents to settle at $13.017 an ounce, while October platinum jumped $15.80 to finish at $1,302.60 an ounce.

Overseas, drawdowns on exchange stockpiles of copper, lead, nickel and zinc bolstered base metals prices on the London Metal Exchange. Nickel rose more than 4 percent, while lead gained more than 6 percent at the close. Nymex copper for September delivery added 6 cents to close at $3.6485 a pound.

On the Chicago Board of Trade, agriculture futures finished mixed, with December corn rising 2.25 cents to $3.4225 a bushel and September wheat down 7.5 cents at $6.30 a bushel. November soybeans gained 9.75 cents to settle at $8.575 a bushel amid concerns that patches of dryness in the Midwest could curtail crop yields. Soybeans begin their crucial pollination period in August.

The dry zone 'probably doesn't amount to 10 percent of the whole producing area, but you could reduce yields in this very sensitive period,' said DTN analyst Gary Wilhelmi.

The U.S. Department of Agriculture reported late Monday that the condition of the nation's corn and soybean crops deteriorated slightly from the previous week but both crops remain in better standing than at this point in the season last year. The report showed 58 percent of both the corn and soybean crops in good-to-excellent condition in the week ended July 29.