Crude oil continued its climb into unchartered waters on Monday, topping $86 for the first time. Trading took place as tensions continued between Iraq and Turkey. Light sweet crude oil was at $86.13, up $2.44 on the day. Crude climbed to as high as $86.22 in morning activity. Oil opened sharply higher and added further gains in the late morning and again in the mid-afternoon. Traders now look ahead to Wednesday's weekly inventory report, which could push crude oil past the $90 mark. In general, crude has been trending up since late August. Oil soared last week amid Thursday's inventory report revealing crude oil inventories fell more than expected in the week ended October 5, according to a report released by the Energy Information Administration. The report showed that crude oil inventories fell by 1.7 million barrels following increases in the two previous weeks. Last week, 15 Turkish soldiers were killed by Kurdistian rebels. The border clash in the Middle East helped push prices up as investors fear violence could cause a disruption in stockpiles. Oil is up for the fifth straight session after closing at $79.02 one week ago. With no major economic data planned for the release on Monday, traders looked ahead to the release of treasury international capital flows data, expected on Tuesday. Reports on housing data and consumer confidence are also slated for Tuesday. Investors continued to digest Friday's data from the Department of Commerce, showing that retail sales rose much more than economists had been expecting due in part to strong sales at gas stations. In separate economic news, data showed wholesale price inflation in the month of September, showing that prices increased by much more than expected due to a significant increase in food and energy prices. Natural gas for November delivery moved to $7.448, up 34.6 on the session. Heating oil increased by 3.16 cents to $2.278 and RBOB gasoline added 3.34 cents to $2.1185. The price of gold extended its 27-year high Monday in early U.S. trading as the dollar continued to decline against other majors. Gold for December delivery added $7.40 to trade at $761.30. This is just off its daily high of $765.40, its best level since 1980. Gold gained as the greenback dropped to a two-week low against the euro and also saw weakness against the pound, yen and others. Gold usually moves opposite the dollar as traders tend to turn to the precious metal as a hedge. In agriculture news, corn prices climbed on Friday in U.S. trading on strong sales data from the U.S. Department of Agriculture. December corn was up $9.20 to $3.53 a bushel. The rally took corn to a weekly high. On Friday, the USDA report weekly sales of approximately 2.3 million metric tons of corn. This is almost double the trade expectations range of 700,000 to 1.1 million MT. Export were 1.2 million MT, 6% above the four-week average. Export commitments are 41% ahead of the pace of a year ago.
October 15, 2007 3:35 PM