* Trading volumes meagre post-Christmas
* Oil up on technical buying, Mideast woes and budget watch
* Wheat at 6-month low on technical selling, weak exports
By Barani Krishnan
Dec 26 Oil prices jumped by the most in weeks on
Wednesday on technical buying, Middle East tensions and signs of
speedier efforts to avert a U.S. fiscal crisis while wheat hit
6-month lows, reversing early gains made on bargain hunting.
Trading across commodities was light, curtailed by London's
Boxing Day holiday and post-Christmas and year-end festivities
Volume in U.S. crude oil was just about half of the 30-day
average despite a 3 percent gain in price -- the biggest
positive move on the 19-commodity Thomson Reuters Jefferies CRB
"The market is taking advantage of thin holiday trading,
boosting out of its trading range," said Addison Armstrong,
director of market research at Tradition Energy in Stamford,
U.S. crude jumped $2.69 to a 6-week high of $91.30 a
barrel. One reason may be technical buying prompted by the
market's drop to below the 100-day moving average the first time
since October, traders said.
In Friday's session, U.S. crude fell to an intraday low
below $88, which was a "big level that a lot of people were
watching", said Bill Baruch, senior market strategist at
iitrader.com LLC in Chicago.
With the rebound, the next support test will be the
200-moving average at $92.20, traders said.
London's Brent oil, a more widely followed benchmark
than U.S. crude, rose nearly 2 percent to a 3-week high of
$110.95 a barrel.
Technical buying aside, oil prices were supported by
continued fighting in Syria, where more than 44,000 Syrians have
been killed since a revolt erupted 21 months ago. Syrian
President Bashar al-Assad sent a senior diplomat to Moscow on
Wednesday to join fresh mediation efforts by the international
community amid more blood-letting in his country.
In the United States, President Barack Obama cut short his
Christmas holiday to return to Washington early on Thursday to
resume budget talks with the opposition, sending a stronger
signal to markets of the government's determination to prevent a
fiscal crisis in the new year.
Crude prices have been pressured since early December by
fear that demand for oil in the United States -- the largest
consumer -- might plunge next year without a fiscal deal to
avert some $600 billion in tax hikes and spending cuts.
U.S. wheat futures fell 2.4 percent, hitting a six-month low
on light technical trading after being pressured by a lack of
export demand, traders said.
Corn and soybeans also sagged in holiday-thinned volume.
Grain markets remained closed in Europe.
Wheat posted the biggest loss for the day on the CRB. The
benchmark March contract dropped 19-1/2 cents to $7.74-1/4
a bushel, after rising modestly in early trading to $7.95-1/4.
"Right now the path of least resistance is lower, until we
find someone who wants to start buying wheat and extending
coverage," said Shawn McCambridge, a grains analyst with
Jefferies Bache in Chicago.
Prices at 1:40 p.m. EST (1840 GMT)
LAST NET PCT YTD
CHG CHG CHG
US crude 90.75 2.13 2.4% -8.2%
Brent crude 110.78 1.98 1.8% 3.2%
Natural gas 3.392 0.046 1.4% 13.5%
US gold 1660.60 1.10 0.1% 6.0%
Gold 1659.60 1.31 0.1% 6.1%
US Copper 359.70 5.10 1.4% 4.7%
LME Copper 7809.85 -21.15 -0.3% 2.8%
Dollar 79.648 0.006 0.0% -0.7%
CRB 0.000 0.000 0.0% -100.0%
US corn 694.75 -9.50 -1.4% 7.5%
US soybeans 1426.50 -13.25 -0.9% 19.0%
US wheat 777.00 -16.75 -2.1% 19.0%
US Coffee 148.00 1.00 0.7% -35.1%
US Cocoa 2271.00 -2.00 -0.1% 7.7%
US Sugar 19.05 0.03 0.2% -18.0%
US silver 30.025 0.128 0.4% 7.6%
US platinum 1535.70 0.80 0.1% 9.3%
US palladium 691.35 7.85 1.2% 5.4%