Malaysian crude palm oil futures closed higher on Thursday, ending a three-day decline on the back of a recovery in crude oil prices, dealers said.
The benchmark third-month December contract on the Bursa Malaysia Derivatives exchange finished up 14 ringgit at 1,537 ringgit ($417) a tonne after trading in a range from 1,530 to 1,543 ringgit. "This recovery is under the influence of crude oil, there is nothing else," said one dealer.
Other traded contracts closed up between nine and 16 ringgit. Overall volume stood at 7,033 lots of 25 tonnes each.
Palm oil is increasingly tracking crude oil prices because of the rapidly expanding global biofuel industry based on vegetable oils, which are seen as a cheaper alternative to fossil fuels. Oil steadied above $59 a barrel on Thursday, supported by signs that the Organisation of the Petroleum Exporting Countries might make larger cuts in output to prop up prices.
The 11-menber group is prepared to make a significant cut in output, sources within Opec said on Thursday. Oil has slid from a record high of $78.40 reached in July, alarming Opec ministers. US crude rose 89 cents to $60.30 a barrel by 1021 GMT. In the physical crude palm oil market, October shipments were quoted at 1,512.50/1,515 ringgit a tonne. Trades were done between 1,510 and 1,520 ringgit a tonne.
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