Energy futures prices registered across-the-board gains in skittish trading Wednesday as traders shrugged off two earlier sessions of decline and a day of continued bickering by Organization of Petroleum Exporting Countries ministers who seemed unwilling to agree on production cuts.
"There was not a lot of logic to what happened . . . but then these guys don't always do what's logical," said James Ritterbusch, vice president for energy futures for Paine Webber Inc. in Chicago. "Trying to outguess them is what leads to this kind of volatility."
In other futures markets, grain and soybean prices were mostly higher; cattle prices were higher, but pork lower, and precious metals climbed modestly.
The energy futures' wild-and-woolly performance was reflected in a frenetic 75-minute session sandwiched around noon. Prices slipped below the psychologically important $18-a-barrel level, then surged near the day's high of $18.55, and just as quickly, slipped back towards $18.
"You could actually see the rumors ripple through the market. Prices started acting like a fire hose without anybody watching it," said Peter Beutel, assistant director of Elders Futures Inc. in New York.
Even though oil prices have steadily declined, analysts were skeptical that significant changes in production quotas or pricing policy would emerge from the Organization of Petroleum Exporting Countries meeting in Vienna, as long as Persian Gulf combatants Iran and Iraq remain at one another's throats.
"Still, when all 13 ministers are in one place, anything could happen," Beutel said. "It's going to be a stay-tuned-for-the-next-episode market as long as they're all there."
Crude oil futures settled 14 cents to 47 cents higher on the New York Mercantile Exchange, with the contract for January at $18.55 a barrel; heating oil was 0.56 cent to 0.75 cent higher, with January at 54.82 cents a gallon, and unleaded gasoline was 0.25 cent to 0.35 cent higher, with January at 46.74 cents a gallon.
Wheat settled 0.25 cent lower to 0.75 cent higher, with the December contract at $3.06 a bushel and corn was 1 cent to 2 cents higher, with December at $1.8625 a bushel.
Cattle futures advanced steadily at the Chicago Mercantile Exchange, but traders felt even the traditional holiday surge of buying hams won't offset an oversupply of pork.
Analysts called November cattle feedlot placements down by as much as 10% from the same period last year. That helped push the April contract--the month that the animals would reach market--ahead by 1.02 cents, leading the surge.
"If we're right, the placements would be the lowest level for November in 13 years," said Chuck Levitt of Shearson Lehman Bros. in Chicago. "I think that sentiment is creeping into the market."
The Agriculture Department's on-feedlot report will be released next Tuesday.
Live cattle was 0.23 cent to 1.02 cents higher, with December at 63.30 cents a pound; feeder cattle were 0.20 cent to 0.97 cent higher, with January at 74.02 cents a pound; live hogs were 0.37 cent lower to 0.10 cent higher, with December at 43.30 cents a pound, and frozen pork bellies were 0.32 cent lower to 0.85 cent lower, with February at 51.72 cents a pound.
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