NEW YORK — Concerns over shrinking inventories of petroleum products lifted energy futures sharply higher Wednesday at the New York Mercantile Exchange.
Products futures led the way after data showed an unexpected weekly decline in stocks of gasoline and a larger-than-expected drawdown in distillate inventories.
The Nymex rally got underway after the Department of Energy reported Wednesday morning that U.S. gasoline stocks dropped 3.4 million barrels to 198.2 million barrels and distillate stocks, which include diesel fuel and heating oil, fell 3.6 million barrels to 110.7 million barrels last week.
Most analysts had projected an increase in gasoline stocks and a smaller draw in distillate stocks.
Traders continue to worry that the slowing global economy will exacerbate a seasonal decline in oil demand in the second quarter, causing a supply glut and further pressuring prices.
Those concerns have brought crude prices under pressure despite the Organization of the Petroleum Exporting Countries’ agreement Saturday to cut oil production by 1 million barrels a day and the Federal Reserve’s move Tuesday to lower short-term interest rates by half a percentage point.
In other commodities trading, May corn fell 1.25 cents to $2.1025 a bushel after setting a contract low of $2.0575. May wheat slid 4.25 cents to $2.6650, after registering a contract low of $2.62, while May soybeans fell 3.50 cents to $4.4325.
In the corn and soybean markets the continued gains in the dollar sent prices tumbling.
“The dollar is killing us. It’s wiping out our ability to compete,” said Jim Bower, a grain broker, and president of Bower Trading in Lafayette, IN. “We are not going to see new demand for our products (corn, beans, wheat) from our Asian customers with our dollar priced so high.”
Cocoa futures fell on the Coffee, Sugar & Cocoa Exchange as speculative selling continued.
A poor performance in the London futures market and a stronger dollar and British pound against the euro acted as a damper for the New York opening, they added. Because cocoa is priced in dollars or pounds, rises in those currencies make it more expensive to buyers. The May contract fell $29 to $957 a metric ton.