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Demand for Oil Increases, Demand for Wheat Declines

December 29, 2011 at 21:08 by Vladimir Vyun

Oil gained today on the positive data from the United States even as the US inventories increased. The Chicago Purchasing Managers’ Index was little changed at 62.5 in December, while a decrease to 60.4 was predicted by specialists, and pending home sales grew 7.3 percent in November, compared to the median forecast of 1.7 percent. Iran responded to the possibility of sanctions from the USA by threatening to stop supplies through the Strait of Hormuz. US stockpiles of crude increased by 3.9 million barrels to 327.5 million barrels last week. February futures for crude oil delivery advanced $0.29 (0.3 percent) to $99.65 per barrel on NYMEX. February contract for Brent oil gained from $107.43 to $107.96 per barrel on ICE as of 21:08 GMT today.

Wheat declined today on prospect for falling demand for the crop in the United States as well as for US exports in other countries. Algeria turned away from the USA to other exporters, Argentina among them perhaps, for supplying wheat. Analysts say that surging prices for the agricultural commodity is the main reason for slower demand. Wheat dropped from $6.4875 to $6.4500 per bushel on CBoT.

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