Bloomberg News

Oil, Gold, Copper Drop; Natural Gas Rises: Commodities at Close

June 21, 2012

The Standard & Poor’s GSCI gauge of 24 commodities fell 1.3 percent to 568.10 at 4:19 p.m. Singapore time. The UBS Bloomberg CMCI index of 26 raw materials dropped 1.1 percent to 1424.207.

CRUDE OIL

Oil dropped to the lowest price in eight months in New York after U.S. stockpiles unexpectedly increased and a report signaled China’s manufacturing will shrink this month.

Oil for August delivery slid as much as $1.34 to $80.11 a barrel in electronic trading on the New York Mercantile Exchange, the lowest price for a front-month contract since Oct. 6. It was at $80.42 at 2:41 p.m. Singapore time. Futures are down 19 percent this year.

NATURAL GAS

Natural gas rose in New York after falling yesterday on forecasts that showed the weather will cool following this week’s heat wave in the eastern U.S.

OIL PRODUCTS

High-sulfur fuel oil rose 48 cents to a premium of 96 cents a barrel to Asian marker Dubai crude at 11:35 a.m. Singapore time, according to data from PVM Oil Associates Ltd., a broker. That’s the widest gap so far this week.

Fuel-oil swaps for July fell $13.25, or 2.2 percent, to $582.50 a metric ton, PVM said. That’s the lowest since June 4. The premium of 180-centistoke fuel oil to 380-centistoke grade, or the viscosity spread, was unchanged after climbing to $9.75. This means bunker, or marine fuel, moved in tandem with higher- quality supplies used in power stations.

Naphtha swaps for July declined $21.25, or 2.9 percent, to $713.75 a ton, according to PVM. The petrochemical and gasoline feedstock was down for a third day.

Naphtha’s premium to London-traded Brent crude futures decreased $19.14 to $17.53 a ton, according to data compiled by Bloomberg. This crack spread, a measure of processing profit, was the narrowest in a week.

Gasoline’s premium to naphtha yesterday rebounded 41 cents to $19.07 a barrel, data compiled by Bloomberg showed. A wider reforming margin indicates it is more profitable to make motor fuel.

The premium of gasoil, or diesel, to Dubai crude increased $2.57 to $19.38 a barrel, according to PVM. The difference, also known as the crack spread, widened the most since March last year.

PRECIOUS METALS

Gold declined for a third day in the longest losing run in a month after the Federal Reserve extended its Operation Twist program while refraining from additional debt purchases. Silver, platinum and palladium retreated.

Spot gold fell as much as 0.6 percent to $1,597.50 an ounce, and was at $1,602.95 at 1:41 p.m. in Singapore. Bullion dropped to a one-week low yesterday after the Fed extended its program of replacing short-term bonds with longer-term debt by $267 billion through the end of 2012.

August-delivery bullion fell for a fourth day on the Comex in New York, losing as much as 1.1 percent to $1,598.10 an ounce before trading at $1,603.50. Holdings in the SPDR Gold Trust, the biggest exchange-traded product backed by bullion, were at a one-month high of 1,281.62 metric tons yesterday, unchanged since June 18, the company’s website showed.

Spot silver declined for a third day, falling as much as 1.5 percent to $27.725 an ounce, and was last at $27.9675. Cash platinum dropped for a third day, sliding as much as 0.6 percent to $1,450 an ounce before trading at $1,457.45. Palladium retreated 0.5 percent to $616.33 an ounce.

BASE METALS

Copper extended losses as China’s manufacturing may shrink for an eighth month and the U.S. Federal Reserve cut growth forecasts, sending commodities to the lowest level since November 2010.

Copper slid as much as 1.8 percent to $7,410 a metric ton, the lowest level since June 14, on the London Metal Exchange and traded at $7,423.25 at 3:28 p.m. Shanghai time. September delivery metal on the Comex fell 1.3 percent to $3.3535 a pound.

GRAINS, OILSEEDS, SOFT COMMODITIES

Palm oil dropped after the U.S. Federal Reserve reduced its 2012 growth outlook and its pledge to expand a stimulus program fell short of investor expectations, sending a commodities benchmark to the lowest level in 19 months.

September-delivery palm oil retreated as much as 1.8 percent to 2,986 ringgit ($942) a metric ton on the Malaysia Derivatives Exchange, after closing yesterday at the highest price for the most-active contract since May 31. Futures were at 2,993 ringgit by the close of the morning session in Kuala Lumpur, extending this month’s loss to 3.5 percent. Palm oil for January delivery dropped 1.5 percent to 7,900 yuan ($1,241) a ton on the Dalian Commodity Exchange.

Soybeans for November delivery declined 0.8 percent to $13.84 a bushel on the Chicago Board of Trade. Soybean oil for December delivery lost 0.7 percent to 51.29 cents a pound. Palm oil and soybean oil are both used in foods and fuels. Soybean oil for January delivery fell 1 percent to 9,414 yuan a ton.

Corn for December delivery fell 0.4 percent to $5.615 after jumping 11 percent in the past two days, the most since October 2010. Wheat for December delivery added 0.2 percent to $6.9475 a bushel.

Rubber slumped by the most in a week after the U.S. Federal Reserve cut growth estimates for the world’s largest economy, raising concerns demand may weaken.

To contact the reporter on this story: Ee Chien Chua in Singapore at echua27@bloomberg.net

To contact the editor responsible for this story: Christian Schmollinger at christian.s@bloomberg.net


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