Commodities Watch: US Oil Supply Surges, Refiners Post Yearly Highs; Cotton Jumps to Limit; Copper, Gold, Silver Shine (SNP, VLO, TSO, WNR, FCX, JJC, COPX, GLD, GDX, GDXJ, SLV, SIL)

Time for our daily look at the world of commodity prices and key developments. The US Energy Information Administration announced today that crude oil stocks in the US grew by 2 million barrels last week. Refinery utilization was running at 84.4% and gasoline inventories dropped by 400,000 barrels. Oh, and the average price of a gallon of gasoline at the pump rose to $3.74, and to $4.10/gallon in California.

If it’s any consolation, China is raising its prices for gasoline as well. Chinese drivers will begin tomorrow paying about $3.70/gallon. China’s government forces the price hikes on its refiners, but then at the end of the quarter China National Petroleum Corp. and China Petroleum and Chemical Corp. (NYSE: SNP), the country’s two largest refiners, get paid back directly by the government.

Two of the largest refiners in the US, Valero Energy Corp. (NYSE: VLO) and Tesoro Corp. (NYSE: TSO), have seen share prices dip today after the EIA’s weekly report. Valero shares are down nearly -2.5%, to $29.77, following a new high today of $31.12. The stock’s 52-week range is $15.49-$31.12. Tesoro also hit a new high today of $28.74, before giving back its gains. The stock is currently down about -3.5%, at $27.24, within its 52-week range of $10.40-$28.74. Smaller competitor Western Refining Inc. (NYSE: WNR) also posted a new 52-week high this morning of $19.50. The stock is now trading down about -2.5%, at $18.60, within its 52-week range of $4.01-$19.50.

Cotton jumped $0.07/pound today, triggering a halt in trading because the white fluffy stuff had hit its daily limit. Demand for cotton is expected to be high again this year, while in the US acres planted in cotton did not increase by the expected 20% over 2010 plantings. US acres devoted to cotton are forecast to rise about 15%, from nearly 11 million acres in 2010 to about 12.6 million acres in 2011. Competition for land from other high-priced grains and oilseeds are partly responsible for the less-than-expected plantings.

Copper continues its spectacular rise, up more than another $0.10/lb today, to $4.37. Regardless of warnings by many observers that non-commercial Chinese buyers are stockpiling copper to use as collateral for loans, traders just can’t seem to get enough of copper futures. China is expected to crack down on the non-commercial stockpiling of copper, but hasn’t done so yet. Even if the Chinese government does take a firm stand, however, there are plenty of indications that copper supply will be short of demand by at least 400,000 metric tons in 2011. Some analysts are predicting an average price for copper of $4.45/pound in 2011. This is nosebleed territory.

Gold is trading above $1,456/ounce this afternoon, primarily because expected interest rate hikes at the European Central Bank and the Bank of England could tamp down equities. Silver is trading above $39/ounce, after peaking earlier in the day at around $39.65.

Among the stocks and funds involved with copper, Freeport-McMoran Copper & Gold Inc. (NYSE: FCX) is essentially flat, at $56.60, within its 52-week range of $28.36-$61.35. The iPath DJ-UBS Copper Total Return Sub-Index ETN (NYSE: JJC) is up more than 3%, at $57.95, within a 52-week range of $36.60-$61.69. The Global X Copper Miners ETF (NYSE: COPX) is also up about 1%, at $20.80, after setting a new 52-week high this morning of $20.98.

The SPDR Gold Shares ETF (NYSE: GLD) is up slightly, to $142.12, after posting a new 52-week high today of $142.62. The Market Vectors gold Miners ETF (NYSE: GDX) is down slightly, at $62.61, with a 52-week range of $45.70-$64.62, The Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) is up slightly, at $41.79, in a 52-week range of $24.25-$44.86.

Silver ETF iShares Silver Trust (NYSE: SLV) set a new 52-week high today of $38.82, but is trading slightly down from that at $38.42 at around 2 pm ET. The Global X Silver Miners ETF (NYSE: SIL) also set a new 52-week high of $30.69, but has given some of that back, trading now at $30.02.

Paul Ausick