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COMMODITIES-Natgas rallies as cold hits U.S.; NY crude oil down

Barani Krishnan
Wednesday, 11 Dec 2013 | 5:09 PM ET

NEW YORK, Dec 11 (Reuters) - Natural gas futures hit 7-month highs on Wednesday after cold weather forecasts bumped up expectations for heating demand in the United States, while U.S. crude prices tumbled on a report showing a build in gasoline inventories.

Copper rose for a fourth straight session in London, hitting a one-month high together with zinc.

But gold edged lower after a three-day rally, as a tentative U.S. budget deal supported expectations for an earlier reduction in the Federal Reserve's monetary stimulus.

The mixed outcome in the energy and metals markets sapped at the strength of the broader commodity complex, tracked by the Thomson Reuters/Core Commodity CRB index.

The 19-commodity CRB ended up just 0.1 percent after the tumble in U.S. crude oil, the index's main component, offset gains in natural gas and 11 other commodities.

U.S. crude settled down 1 percent at $97.44 per barrel in New York after data from the U.S. Energy Information Administration showed domestic gasoline inventories posting a 6.7 million barrel build in the week to Dec. 8, their largest since January.

Europe's Brent crude ended up 0.3 percent at $109.70 in London, after following U.S. crude oil down earlier in the session.

Natural gas outperformed all of the CRB, rising 2.3 percent, after weather reports that forecast colder weather in the United States than previously expected.

The front-month contract for U.S. natural closed at $4.337 per million British thermal units, versus Tuesday's $4.237. The contract has gained more than 9 percent this month.

"The market may be overbought ... (but) it moved up today with the colder weather model. There's more cold expected next week," said Aaron Calder, analyst at Gelber & Associates in Houston.

The latest National Weather Service six- to 10-day outlook issued on Tuesday called for below-normal temperatures across consuming regions in the Northeast and Midwest and above-normal readings in the western half of the nation and in Florida.

Benchmark copper in London closed up nearly 1 percent at $7,220 a tonne, its highest since Nov. 4. Over the past week, the market has gained nearly 4 percent.

Copper has also broken above its 200-day moving average, a key technical signal for those who examine chart patterns.

The copper market is "beginning to wake up to the fact that Chinese demand has been improving," Barclays analyst Gayle Berry said. "It has been improving since the second quarter, and the pace of consumption has continued to pick up."

U.S. gold futures for February delivery settled down $3.90 at $1,257.20 in New York, with trading volume about 30 percent below its 30-day average, preliminary Reuters data showed.

In crop markets, robusta coffee dropped nearly 3 percent in New York, recoiling from Tuesday's 3-1/2 month highs. Corn firmed on in subdued trade in Chicago, after fund short-covering and strong domestic ethanol production.

Prices at 4:57 p.m. EDT (2157 GMT)

LAST/ NET PCT YTD

CLOSE CHG CHG CHG

US crude 97.37 -1.14 -1.2% 6.0% Brent crude 109.79 0.41 0.4% -1.2% Natural gas 4.337 0.100 2.4% 29.4% US gold 1257.20 -3.90 -0.3% -25.0% Gold 1249.80 -1.55 -0.1% -25.4% US Copper 3.30 0.03 0.9% -9.8% LME Copper 7220.00 61.00 0.9% -9.0% Dollar 79.887 -0.079 -0.1% 4.1% CRB 281.016 0.249 0.1% -4.7% US corn 431.25 3.75 0.9% -38.2% US soybeans 1344.00 5.75 0.4% -5.3% US wheat 630.25 0.75 0.1% -19.0% US Coffee 109.70 -0.55 -0.5% -23.7% US Cocoa 2755.00 -18.00 -0.6% 23.2% US Sugar 16.51 -0.11 -0.7% -15.4% US silver 20.356 20.153 1.6% -32.7% US platinum 1385.20 -3.50 0.0% -10.0% US palladium 738.55 0.10 0.0% 5.0%