* Oil overcomes early lows on strength of US equities
* US soy price up most in 7 month as Argentina output hit
* Copper at 3-week low, gold near 6-month bottom
* London cocoa at 10-month low, NY arabica coffee down too
* CRB flat as oil, soy run-up help offset losses elsewhere
By Barani Krishnan
NEW YORK, Feb 19 Oil prices inched up on
Tuesday, following stock markets higher, despite threats of a
buildup in U.S. crude supplies and economic worries in Europe,
and soybean futures advanced their most in seven months on
prospects of lower Argentine production.
Metals markets ended broadly lower.
Copper hit a three-week low, depressed by unease over top
consumer China's limp return to the market from a week-long
holiday. Gold fell near a six-month low, holding just above
$1,600 an ounce, as an equities rally and signs of an improving
global economic outlook dented bullion's safe-haven appeal.
Prices of soft commodities such as cocoa and coffee also
Cocoa hit a 10-month low in London trade, pressured
by a good supply outlook for West Africa's mid crops. Arabica,
the premium coffee grade, fell as expectations for large
global supplies pressured prices.
The 19-commodity Thomson Reuters-Jefferies CRB index
settled flat after the run-up in oil, soybeans and two
other markets -- natural gas and sugar --
offset the losses in metals, coffee and cocoa.
OIL TRACKS STOCK MARKET RALLY
Oil prices rose as traders grew bullish amid a rally in U.S.
stock markets, even as U.S. pipeline bottlenecks and European
economic concerns threatened to weigh on oil markets.
U.S. equities indices are hovering near five-year highs on
prospects for quicker economic recovery, healthy U.S. corporate
earnings and a spate of large corporate mergers. Wall Street's
S&P 500 stock index rose by about 0.6 percent on Tuesday.
"Oil traders see the rise in equities and decide to buy oil
too," said Tim Evans, analyst at Citi Futures in New York. "Some
might expect more oil demand driven by the equities rally. But
it's likely a correlated trade flow that isn't based on oil
U.S. crude's front-month contract settled up 80 cents
at $96.66 a barrel.
London's Brent crude rose 14 cents to settle $117.52
a barrel after initially falling more than 80 cents on European
Oil ended up even as the operators of the 400,000 barrel per
day Seaway Pipeline from their Oklahoma delivery point to
southern Texas said the line would not be able to reach full
capacity in the "foreseeable future," potentially leading to
surplus crude in the U.S. Midwest.
SOY UP ON WEAK ARGENTINE CROP OUTLOOK
Soybean futures jumped 3 percent, their biggest advance in
seven months, on concerns about crop prospects in Argentina
following disappointing rainfall.
The front-month soybean contract in Chicago initially
broke above resistance at its 50-day moving average of $14.38
It then penetrated key resistance at the 100- and 200-day
moving averages of $14.56 and $14.57, respectively, before
settling at $14.70-1/4.
Argentine crop worries aside, soybeans also gained support
from slow shipments from Brazil. China's returns to the buy-side
of the market after Lunar holidays and follow-through buying
after last week's rebound from one-month lows were other
"We saw a shift in momentum late last week so it's technical
and also the rains in Argentina, particularly in the south, were
disappointing," said Sterling Smith, futures specialist for
Argentina is the world's third-largest exporter of soybeans
after the United States and Brazil and is the world's largest
exporter of soyoil and soymeal.
Prices at 5:19 p.m. EST (2218 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US crude 96.66 0.80 0.8% 5.3%
Brent crude 117.26 -0.12 -0.1% 5.5%
Natural gas 3.272 0.119 3.8% -2.4%
US gold 1603.60 -5.20 -0.3% -4.3%
Gold 1604.14 -0.07 0.0% -4.2%
US Copper 364.95 -8.75 -2.3% -0.1%
LME Copper 8050.00 -69.00 -0.8% 1.5%
Dollar 80.483 -0.095 -0.1% 4.8%
US corn 695.25 -3.50 -0.5% -0.4%
US soybeans 1470.25 45.75 3.2% 3.6%
US wheat 732.25 -10.00 -1.4% -5.9%
US Coffee 136.50 -0.45 -0.3% -5.1%
US Cocoa 2129.00 -12.00 -0.6% -4.8%
US Sugar 18.22 0.22 1.2% -6.6%
US silver 29.422 -0.427 -1.4% -2.7%
US platinum 1697.50 19.80 1.2% 10.3%
US palladium 764.15 11.00 1.5% 8.6%