Tags: crude | oil | nymex | isaac

Commodities Gain; Oil Rises as Isaac Curbs Output

Tuesday, 28 August 2012 09:52 AM

Commodities rose on Tuesday for the first time in four sessions after oil prices were supported by worries of possible storm damage to energy installations in the U.S. Gulf of Mexico and soybeans and sugar came off a profit-taking spree.

Spot gold rose as weak U.S. consumer confidence boosted speculation that Federal Reserve chairman Ben Bernanke would hint at new stimulus measures when he addresses an annual meeting of central bankers and finance ministers in Jackson Hole, Wyoming, on Friday.

But copper fell, bucking the trend, as some investors felt less sure the Fed was ready to expand its bond-buying program to inject more capital into the economy.

"I don't think we can expect more quantitative easing, so markets could be disappointed," said Andrey Kryuchenkov, commodities analyst at Moscow-based VTB.

The Thomson Reuters-Jefferies CRB index, the commodity market bellweather, closed up for the first time since Aug. 22, largely on the strength of oil. The 19-commodity index was up 0.3 percent, after losing 0.7 percent in the last three sessions.

U.S. crude oil, which has the largest weighting on the CRB, ended up 86 cents, or almost 1 percent, at $96.33 a barrel as Tropical Storm Isaac neared hurricane strength in the Gulf of Mexico, forcing companies in the region to close down oil production platforms and refineries.

The Gulf of Mexico is home to almost 45 percent of U.S. crude refining capacity. Isaac, which became a hurricane on Tuesday, was about 80 miles (125 km) southeast of the mouth of the Mississippi River and expected to reach the coast of Louisiana as early as Tuesday evening, the U.S. National Hurricane Center said in its most recent advisory.

U.S. crude rose on news of Isaac's advance, prices of London's Brent oil closed up 0.3 percent, or 32 cents, at $112.58 per barrel.

Soybean futures rose as signs of good export demand led to short-covering that erased early losses in the session. The key November contract for Chicago-traded soybeans climbed 12.25 cents to a session high of $17.31 per bushel, from the day's low of $17.01.

U.S. sugar futures turned higher after hitting an 11-week low, and traders said the market appeared to be looking to consolidate from its recent weakness.

New York-traded raw sugar for October jumped 0.57 cents, or 3 percent, to close at 20.13 cents a lb. It earlier struck a session low of 19.45, which marked a bottom since June 6.

U.S. copper for September delivery fell 1.40 cents, or nearly half a percent, to settle at $3.4625 per lb.

"Copper will probably want to stick right around here ... I really don't see it breaking meaningfully above $3.55 or below $3.35," said Zachary Oxman, managing director with TrendMax in Encinitas, California.

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Tuesday, 28 August 2012 09:52 AM
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