COMMODITIES : Oil Futures Prices Rally to Close Above $17 Per Barrel

Oil futures prices put on a late rally and broke past $17 a barrel Thursday, with traders at the New York Mercantile Exchange looking ahead to a weekend OPEC committee meeting on prices.

On other markets, grain and soybean futures were mostly higher, livestock were mostly weaker and precious metals were mixed.

Most of the action in the energy markets was buying to offset earlier sales to square away accounts before the price committee meeting, said Andrew Lebow, an analyst in New York with E.D.& F. Man International Futures Inc.

“There’s the general expectation that the (Organization of Petroleum Exporting Countries’) price committee isn’t going to do anything substantial,” he said. “In fact, they have no power to do much of anything.

“But there’s still some fear that OPEC could throw a curve ball” and take meaningful steps to stabilize international oil prices, he said.

Gasoline and heating oil futures also advanced, responding to firm demand and to the rally in crude oil, Lebow said. West Texas Intermediate crude oil settled 23 cents to 26 cents higher, with the contract for delivery in May at $17.06 a barrel; heating oil was 0.39 cent to 0.71 cent higher, with May at 45.73 cents a gallon, and unleaded gasoline was 0.35 cent to 0.40 cent higher, with May at 48.82 cents a gallon.

Bull Market Stalls

Livestock futures were mostly lower, while pork bellies advanced at the Chicago Mercantile Exchange.

“The cattle market is basically on the fence,” said Chuck Levitt, an analyst in Chicago with Shearson Lehman Hutton Inc.

A recent bull market appears to have stalled because the profit margins of processors and retailers are very thin and they see larger supplies later in the spring, he said.

“So they’re not willing to commit themselves in a big way to feature or push beef.”

This means that processors are resisting paying top dollar for live cattle, but at the same time there is no surplus of market-ready animals, so the producers aren’t willing to drastically cut their prices.

Pork futures are stymied by their high price compared to the cash market, Levitt said.

“The premium (about $7 a hundredweight) is about as wide as it’s been any time in the 1980s,” he said.

“So before they can move ahead, futures need cash prices to catch up,” Levitt said.

Live cattle were 0.20 cent lower to 0.15 cent higher, with the April contract at 73.82 cents a pound; feeder cattle were unchanged to 0.20 cent lower, with April at 79.57 cents a pound; live hogs were 0.45 cent lower to 0.27 cent higher, with April at 45.35 cents a pound, and frozen pork bellies were 0.08 cent to 0.40 cent higher, with May at 53.32 cents a pound.

Soybean futures prices put on a late rally and pulled corn a little higher at the Chicago Board of Trade.

A large speculator who had driven prices up earlier in the week came into the market as a buyer again, said Dale Gustafson, an analyst with Drexel Burnham Lambert.

This forced traders, who had sold earlier in the hope that prices would decline, to start buying to limit their losses.