October 11, 2012 / 7:17 PM / 5 years ago

COMMODITIES-Oil up on Turkey-Syria tensions; natgas at 2012 peak

* Brent crude, corn hit three-week highs
    * Gold snaps four-day decline, copper up too
    * Natgas up for fourth day on light stockpiles
    * Sugar, coffee, cocoa down as supply pips demand

    By Barani Krishnan
    NEW YORK, Oct 11 (Reuters) - Oil prices jumped on Thursday
on escalating Turkish-Syrian tensions and expectations of lower
crude output from key production fields in the North Sea, while
corn hit three-week highs as government data pointed to the
smallest U.S. crop in six years.
    Gold rose, snapping four days of declines, as the dollar's
slide against the euro enhanced demand prospects for
commodities priced in the U.S. currency by making them more
affordable to overseas buyers. .
Copper bounced from a two-week low. 
    Soft commodities bucked the up-trend across raw materials,
with sugar, cocoa and coffee falling due to ample supplies and
poor demand prospects. 
    The Thomson Reuters-Jefferies CRB index, a
commodities bellwether, rose 0.6 percent after gains in 11 of
its 19 components. Corn outperformed the pack, closing 5 percent
    Natural gas was another strong performer, hitting a 2012
high and climbing nearly 4 percent. The market closed up for a
fourth straight day after a government report showed a weekly
inventory build well below market expectations. 
    Oil prices rose by about 1 percent.
    London's Brent crude closed up $1.38 at $115.71 a
barrel, after setting a three-week high at $116. U.S. crude
, the weightiest CRB component, settled up 82 cents at
$92.07 a barrel. 
    Oil ran up after NATO member Turkey forced a Syrian
passenger plane to land and seized what it suspected was
military equipment being ferried from Russia to Syria and the
embattled government of President Bashar al-Assad. Moscow
accused Turkey of endangering Russian lives. 
    "The Syrian situation is heating up and there are fears
about Turkey, a NATO member, retaliating and contagion in the
region," said Bjarne Schieldrop, analyst at SEB in Oslo. 
    Oil prices also drew support from worries about shrinking
output from North Sea fields. Reuters calculations showed North
Sea crude oil output from 12 production streams was set to fall
by about 1 percent in November. 
    Chicago-traded corn futures surged after the U.S. Department
of Agriculture estimated the drought-plagued corn crop in the
country as the smallest in six years. The USDA also slashed its
forecast for global grain ending stocks.
    U.S. corn's front-month contract finished up 36-1/2
cents at $7.73-1/4 a bushel. It hit $7.37 during the session, a
high dating back to Sept. 17.
    Soybeans closed up 1.7 percent at $15.48-1/2 a bushel
after USDA data showed the so-called stocks-to-use ratio for the
oilseed would be the tightest since the mid-1960s. Wheat 
gained 1.9 percent to end at $8.86 a bushel.
    The USDA left unchanged the number of U.S. harvested acres,
keeping the door open for further revisions as farmers abandoned
fields that would produce no grain due to the most extensive
drought in 56 years in the world's biggest corn, soybean and
wheat exporter.
    "The most glaring thing that I saw was that they didn't
address the harvested acres, they didn't lower the harvested
area, and at some point this will have to be addressed,"
Citigroup market strategist Sterling Smith said. 
    The fundamentals for corn were particularly bright, he said.
"The ending stocks numbers are all that we're going to have to
work with now and I think they'll have to lower those even
 Prices at 4:18 p.m. EDT (2018 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    92.40     1.15   1.3%   -6.5%
 Brent crude                115.73     1.40   1.2%    7.8%
 Natural gas                 3.604    0.129   3.7%   20.6%
 US gold                   1770.60     5.50   0.3%   13.0%
 Gold                      1766.74     4.80   0.3%   13.0%
 US Copper                  375.15     3.35   0.9%    9.2%
 LME Copper                8239.50    74.50   0.9%    8.4%
 Dollar                     79.793   -0.124  -0.2%   -0.5%
 US corn                    773.25    35.50   4.8%   19.6%
 US soybeans               1548.50    24.75   1.6%   29.2%
 US wheat                   897.00    16.00   1.8%   37.4%
 US Coffee                  160.75    -2.70  -1.7%  -29.6%
 US Cocoa                  2351.00   -21.00  -0.9%   11.5%
 US Sugar                    20.45    -0.81  -3.8%  -12.0%
 US silver                  34.082   -0.027  -0.1%   22.1%
 US platinum               1689.60    11.10   0.7%   20.3%
 US palladium               650.90     1.00   0.2%   -0.8%
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