Gas Jumps 7.8% on Chesapeake Output Cut: Commodities at Close

The Standard & Poor’s GSCI Spot Index of 24 raw materials advanced 1.1 percent to close at 658.85 at 4:04 p.m. in New York, led by natural gas and base metals.

The UBS Bloomberg CMCI index of 26 prices gained 1.3 percent to 1,581.656.

NATURAL GAS

Natural gas, the worst-performing commodity in 2012, rose the most in two years in New York after Chesapeake Energy Corp., the second-largest U.S. producer, said it will cut production and reduce spending.

Futures climbed 7.8 percent after Chesapeake said it will “immediately curtail” output of 500 million cubic feet a day and lower planned investment in gas fields by 70 percent from 2011 levels to $900 million. Hedge funds and other large speculators last week cut bets that gas would fall as it traded at its lowest levels since 2002, a government report showed.

On the New York Mercantile Exchange, gas for February delivery rose 18.2 cents to settle at $2.525 per million British thermal units. The percentage increase was biggest since Dec. 10, 2009. The futures are down 16 percent this year.

Gross production at Chesapeake wells will be cut by as much as 1 billion cubic feet a day as gas-well completions are deferred wherever possible, the Oklahoma City-based company said in a statement today. The reduction equals about 1.5 percent of U.S. marketed gas output in 2011, Energy Department data show.

The company will idle half of its drilling rigs by the second quarter in fields that produce only gas, including Barnett Shale of Texas, the Marcellus Shale and the Haynesville Shale.

BASE METALS

Copper futures rose as European Union finance ministers took steps to tame the region’s debt crisis, improving prospects for metal demand.

Ministers were to discuss new budget rules, a financial firewall to protect indebted states and a Greek debt swap. Copper also advanced as imports by China, the world’s biggest consumer, climbed to a record, and speculators turned bullish for the first time in four months.

On the Comex, copper futures for March delivery rose 1.4 percent to settle at $3.7985 a pound. The price has climbed 11 percent this month.

On the London Metal Exchange, copper for delivery in three months gained 1.8 percent to $8,365 a ton ($3.79 a pound).

Aluminum, lead, zinc and tin also climbed in London, while nickel declined.

PRECIOUS METALS

Gold futures jumped to a six-week high as the dollar dropped against the euro, enhancing the appeal of the precious metal as an alternative asset.

Gold for February delivery gained 0.9 percent to close at $1,678.30 an ounce on the Comex after touching $1,681.80, the highest price for a most-active contract since Dec. 12. The precious metal has advanced 7.1 percent this month.

Silver futures for March delivery advanced 1.9 percent to close at $32.27 an ounce after touching $32.775, the highest level since Dec. 8.

On the Nymex, platinum futures for April delivery rose 1.9 percent to $1,561.10 an ounce, the biggest gain in a week. Palladium futures for March delivery climbed 1.9 percent to $688.85 an ounce, after rising to $689, the highest price for a most-active contract since Dec. 7.

CRUDE OIL

Oil rose for the first time in four days after the European Union agreed to ban crude imports from Iran, raising concern that retaliation from the Islamic Republic may disrupt oil supply from the Middle East.

Futures gained 1.3 percent as the 27-nation bloc said it would implement the crude embargo starting July 1 to pressure the country over its nuclear program. Iran has threatened to close the Strait of Hormuz, the transit point for about a fifth of global oil, if its exports are banned.

On the Nymex, oil for March delivery climbed $1.25 to settle at $99.58 a barrel. Prices have increased 12 percent in the past year.

Brent oil for March settlement advanced 72 cents, or 0.7 percent, to $110.58 a barrel on the London-based ICE Futures Europe exchange.

OIL PRODUCTS

Heating oil rose on speculation that Europe will import more diesel from the U.S. as European Union foreign ministers agreed to ban oil from Iran starting July 1 and European refiners shut plants.

On the Nymex, February-delivery heating oil advanced 2.14 cents to settle at $3.0098 a gallon after touching $3.0356. Futures have increased 2.5 percent this year.

Gasoline for February delivery fell 0.65 cent to settle at $2.7779 a gallon on the exchange, the third consecutive decline since the Jan. 19 Energy Department report on inventories.

GRAINS, OILSEEDS

Corn and soybeans rose to the highest prices in more than a week on speculation that weekend rains in Argentina were too light to revive crops hurt by weeks of dry weather, increasing demand for supplies from the U.S.

Corn futures for March delivery increased 1.4 percent to close at $6.20 a bushel on the Chicago Board of Trade after touching $6.2125, the highest price for a most-active contract since Jan. 12. The grain rose 2 percent last week on expectations that dry weather will reduce South American yields.

Soybean futures for March delivery added 2.6 percent to $12.175 a bushel after touching $12.19, the highest level since Jan. 11. The oilseed rose 2.5 percent last week.

Wheat futures for March delivery advanced 1.5 percent to settle at $6.1975 a bushel. They reached $6.215, the highest price for a most-active contract since Jan. 12. The commodity has dropped 5.1 percent this month.

SOFT COMMODITIES

Orange-juice futures surged to a record for a second session on mounting concern that citrus-greening disease in Texas and government tests for a banned fungicide in Brazil may reduce U.S. supplies.

On ICE Futures U.S. in New York, orange-juice futures for March delivery climbed 4.4 percent to close at $2.1995. The commodity has gained 30 percent this month.

Raw-sugar futures for March delivery rose 0.3 percent to 24.96 cents a pound. The price advanced for the sixth straight session, the longest rally since November 2010.

Cocoa futures for March delivery advanced 0.4 percent to $2,269 a metric ton. The price has climbed 7.6 percent this month.

Arabica-coffee futures for March delivery fell 2.6 percent to settle at $2.1945 a pound.

Cotton futures for March delivery gained 0.8 percent to settle at 99.37 cents a pound. The fiber has risen 8.2 percent this month.

LIVESTOCK

Hog futures climbed to a six-week high on signs of increasing U.S. pork demand as domestic stockpiles of ham and pork bellies slide. Cattle prices rose.

On the Chicago Mercantile Exchange, hog futures for April settlement climbed 1.7 percent to close at 88.5 cents a pound after reaching 88.775 cents, the highest price since Dec. 8.

Cattle futures for April delivery rose 0.4 percent to close at $1.28175 a pound.

Feeder-cattle futures for March settlement slid 0.1 percent to close at $1.5375 a pound.

To contact the reporter on this story: Christine Buurma in New York at cbuurma1@bloomberg.net;

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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