November 9, 2012 / 9:05 PM / 5 years ago

COMMODITIES-Gasoline jumps on tight supply, better US sentiment

* Markets jump as US consumer sentiment hits 5-year high

* CRB up for the week, first time in 6 weeks

* Gasoline leads gains, up 3 pct on day, on Sandy woes

* Oil also rises, along with cocoa, copper

By Barani Krishnan

NEW YORK, Nov 9 (Reuters) - Gasoline futures in New York surged on Friday as supplies remained tight after Hurricane Sandy, and oil and commodities such as cocoa and sugar also rose as U.S. consumer sentiment hit a five-year high in spite of the nation’s economic woes.

Data showing an acceleration in infrastructure investment in China and the highest production in five months from the country’s factories lent more support to raw materials prices.

The dollar’s rally against the euro proved to be a negative for some commodities priced in the U.S. currency, including copper and arabica coffee.

The dollar was bolstered by data showing U.S. consumer sentiment at a five-year high despite worries of a looming recession, with nearly $600 billion worth of spending cuts and tax increases scheduled to go into effect early next year.

The euro fell to a two-month low as growth in Germany appeared to slow for a fourth quarter, and France said it was headed for negative growth.


The Thomson Reuters-Jefferies CRB index, a globally watched indicator for commodities, settled up slightly after 10 of the 19 markets it tracked ended higher.

On a weekly basis, it was the first positive close for the CRB since the week ending Sept. 30.

For weeks, the CRB had declined on a combination of worries over Europe and the potential delay in U.S. economic recovery due to Hurricane Sandy. The dollar’s unexpected strength against the euro -- despite a third round of U.S. quantitative easing since September -- also caught many offguard.

“A lot of people expected a weaker dollar post-QE III and that hasn’t been the case recently,” said BNP Paribas analyst Stephen Briggs.


Front-month gasoline on the New York Mercantile Exchange settled up 91 cents at $2.6992 per gallon. Its 3.5 percent gain on the day was the highest on the CRB.

Dealers attributed the rally in gasoline to speculation over delivery problems and tight supplies in storm-hit New York Harbor and the first rationing of gasoline in New York City since the 1970s.

The New York Harbor, delivery point for the NYMEX gasoline contract, was still in a flux 11 days after Hurricane Sandy struck the U.S. Northeast. Many energy terminal operations were still constrained, refineries were shut and the retail supply chain for gasoline remained squeezed.

Crude oil prices also rose, although more modestly than gasoline.

Front-month crude in New York settled up 1.2 percent at $86.07 a barrel. In London, Brent crude climbed as much as 2 percent to a session high of $109.78.


Front-month raw sugar settled up 1.2 percent at 19.06 cents lb positive in New York, on talk that rain in top grower Brazil had slowed down cane crushing.

Cocoa finished up nearly 1 percent at $2,359 per tonne on forecasts for lower production in the beverage and confection commodity.

“We expect global cocoa production to fall mainly due to adverse weather conditions in West Africa that have hampered production. We forecast a 98,000-tonne deficit in the cocoa market,” Barclays said in a note.

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