Tokyo rubber recovers as oil rally helps buying
[2008-4-10]
Tokyo rubber futures rose on Thursday, snapping a two-day decline after a rally in crude oil prices to a record high the previous day bolstered buying.
Higher crude prices often benefit rubber prices because investors believe expensive oil will encourage a shift to natural rubber from synthetic rubber, a petroleum product.
The most-active September rubber contract on the Tokyo Commodity Exchange was up 1.0 yen at 285.6 yen a kg as of 0044 GMT. The contract fell a total 2.5 percent in the previous two sessions.
The nearby April contract was up 2.8 yen at 279.1 yen.
Traders said the nearby April is now in discount to physical rubber prices, and buying it makes sense for some traders looking for cheaper deliveries.
Seasonally limited rubber supply is expected to support the TOCOM market. Farmers in Thailand, the world's biggest rubber producer, and Malaysia, the third-biggest, are set to resume tapping in late April when the dry season ends.
As for the benchmark September contract, a level of around 290 yen is seen by traders as resistance now that its gain earlier this week stopped on fund selling at 294.4 yen, the highest for any benchmark since March 13.
U.S. crude oil futures edged down on Thursday from a record settlement a day earlier but stood above $110, supported by the U.S. government data that showed a sharp drop in U.S. fuel inventories ahead of the summer driving season. [ID:nT160821]
U.S. crude for May delivery CLc1 traded at $110.81 per barrel, having hit an interday record of $112.21 on Wednesday.
Higher crude prices often benefit rubber prices because investors believe expensive oil will encourage a shift to natural rubber from synthetic rubber, a petroleum product.
The most-active September rubber contract on the Tokyo Commodity Exchange was up 1.0 yen at 285.6 yen a kg as of 0044 GMT. The contract fell a total 2.5 percent in the previous two sessions.
The nearby April contract was up 2.8 yen at 279.1 yen.
Traders said the nearby April is now in discount to physical rubber prices, and buying it makes sense for some traders looking for cheaper deliveries.
Seasonally limited rubber supply is expected to support the TOCOM market. Farmers in Thailand, the world's biggest rubber producer, and Malaysia, the third-biggest, are set to resume tapping in late April when the dry season ends.
As for the benchmark September contract, a level of around 290 yen is seen by traders as resistance now that its gain earlier this week stopped on fund selling at 294.4 yen, the highest for any benchmark since March 13.
U.S. crude oil futures edged down on Thursday from a record settlement a day earlier but stood above $110, supported by the U.S. government data that showed a sharp drop in U.S. fuel inventories ahead of the summer driving season. [ID:nT160821]
U.S. crude for May delivery CLc1 traded at $110.81 per barrel, having hit an interday record of $112.21 on Wednesday.
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