SMH.com - 23/5/2006

US crude futures ended sharply higher as a rebound across commodity markets sparked late buying.

Forecasts for a busy Atlantic hurricane season, which begins on June 1, as well as volatile trading ahead of expiration of the June crude contract helped push prices higher, traders said.

Crude for June delivery, which has expired, settled 70 US cents higher at $US69.23 on the New York Mercantile Exchange.

NYMEX July crude settled at $US69.96, up 67 US cents.

In London, July Brent crude ended at $US69.35, up 67 US cents.

NYMEX June gasoline ended 1.90 US cents up at $US2.0574 a gallon.

June heating oil gained 1.25 US cents at $US1.9326 a gallon.

Commodities prices rebounded as big drops earlier in the day brought bargain hunters to oil and metals..

The 2006 Atlantic hurricane season will be very active, with up to 10 hurricanes, although not as busy as record-breaking 2005.

The day's rebound followed a drop of nearly five percent in crude oil futures last week after signs that pricey raw materials were pushing up the cost of living and hitting consumers' pockets.

Rising inflation may force central banks to raise interest rates, which could slow growth and cut demand for commodities.

Meanwhile, oil market fundamentals would indicate an OPEC production cut, Venezuelan Energy Ministry Rafael Ramirez told reporters Monday in Caracas.

The June 1 OPEC meeting will be held in Caracas.

Earlier, Qatari Oil Minister Abdullah al-Attiyay told Reuters that OPEC looks set to keep pumping oil at close to full capacity at the Venezuela meeting.