Crude prices rose modestly on Wednesday after the latest US inventories data showed a larger-than-expected fall in heating oil stocks last week due to a blast of winter weather.
ICE March Brent added 10 cents at $58.52 a barrel while Nymex March West Texas Intermediate gained 15 cents at $59.03 a barrel.
The Energy Information Administration said crude stocks fell by 400,000 barrels last week compared with the consensus market forecast of a 1.4m barrel increase.
Cold weather has increased demand for heating in the US Midwest and north-east so traders’ attention focused on distillate stocks, including heating oil, which fell by 3.7m barrels last week, slightly more than the consensus forecast of a 3.2m barrel decline.
Nymex March heating oil rose just under 0.7 cents to $1.6984 a gallon.
Gasoline stocks rose by 2.6m barrels last week, above the consensus forecast for a rise of 1.8m barrels, and breaking a run of seven consecutive weeks of inventory declines. Nymex March RBOB gasoline was flat about $1.5745 a gallon.
Gold was range-bound, just 0.2 per cent firmer at $654.60 a troy ounce, supported by oil. Traders said short-term gains could be limited due to foreign exchange uncertainty ahead of this weekend’s meeting of the Group of Seven industrialised nations.
Speculators have been building their exposure to gold, which now stands at its highest level since May 2006, according to the Commodity Futures Trading Commission. This poses the risk of a price setback if sentiment deteriorates, according to traders.
However, UBS has raised its three-month gold forecast to $700 a troy ounce from $650 previously. John Reade said jewellery and investor demand would prevent prices falling too far, but in the event of a correction a move below $640 would present a “table-banging buying opportunity”.
Wholesale US corn prices are expected to reach a record $3.50 a bushel even though the US Department of Agriculture is projecting a record harvest of 12.065bn bushels for the current marketing year ending August 31. Increasing ethanol demand is bolstering corn prices and the projected year-end corn stockpile at 660m bushels is expected to be the lowest since 1995-96.
In Chicago, the March corn contract traded 2 cents lower at $3.945 a bushel.
Most base metals traded in narrow ranges with copper 0.8 per cent lower at $5,425 after a rise of 3,175 tonnes in LME stocks but aluminium fell 1.8 per cent to $2,657 a tonne after a rise of 1,550 tonnes in LME stocks.
Nickel was marginally weaker at $35,750 a tonne after a small rise of 138 tonnes in LME stocks, the first inflow since early January.
Zinc retreated 1.6 per cent to $3,170 a tonne in spite of a fall of 825 tonnes in LME stocks which remain below the psychologically important 100,000 tonne level.
In Indonesia, five tin smelters on the island of Bangka have been allowed to restart production after a government crackdown last year on unregulated activity. Tin edged 0.7 per cent lower to $11,857 a tonne after a fall of 215 tonnes in LME stocks.