SUPPLIES, MIDEAST TENSION FUEL GAINS IN OIL
Petroleum futures rallied today in a
market that was expecting declines in domestic supplies and
became further unsettled by escalated Mideast fighting.
    Crude oil, gasoline and heating oil all posted gains on the
New York Mercantile Exchange, with crude oil prices matching
life-of-contract highs. Crude for delivery in May closed 17
cents higher at 18.84 dlrs a barrel.
    "Crude futures could jump above 19 dlrs a barrel but will
not remain there long if products are not strong," Robert
Murphy, account executive at E.F. Hutton, said.
    Traders said prices were supported by anticipation that the
American Petroleum Institute would report a decline in domestic
inventories of petroleum products in a weekly report.
    Traders said prices also were supported by an escalation in
the Iran-Iraq war, with the Iranians reportedly launching a new
offensive against Iraqi positions, and Iraq attacking offshore
oil fields and an oil export depot.
    Buying by speculators continued to prompt gains in gold and
silver futures on the Commodity Exchange in New York.
    Gold prices retreated at midday, but rallied before the
close with support from the silver market, which was
approaching two-year highs, traders said.
    Soybean futures posted strong gains on the Chicago Board of
Trade, while corn and wheat were mostly higher.
    Traders said cash sales have been slow in the country, and
the soybean harvest in Brazil has been delayed by rain, which
is limiting supplies.
    In addition, the Agriculture Department last week projected
a substantial drop in soybean acreage this year.     Monday's
report that the USDA inspected 46 mln bushels of corn for
export last week was unexpectedly high and, coupled with a lack
of farm sales, provided support for the corn market, traders
said.
    Live hogs and frozen pork bellies rallied on the Chicago
Mercantile Exchange, while cattle ended lower.
    Live hogs pushed ahead on a lack of supplies because many
farmers are turning their attention to spring planting rather
than marketing livestock, traders said, noting that cash sales
have been lighter than expected this week.
    The lack of marketing also has supported pork bellies, but
prices drifted lower for moderate losses in nearby months as
speculators sold contracts to take profits, traders said.
    Cattle prices closed lower but continued to show strength
related to tight supplies.
    Prices pushed ahead to new contract highs, extending gains
past three-year peaks set Monday, as tight supplies forced meat
packers to bid aggressively for available animals.
    However, some traders sold contracts to take profits after
the extended rally, which has seen the April delivery contract
soar to 69.90 cents a pound from 56 cents a pound at the start
of the year.
    New York coffee futures closed higher on trade talk Brazil
would not be an aggressive seller near term, analysts said.
 Reuter
