By Claire Leow June 4 (Bloomberg) -- Palm oil futures posted a weekly gain as crude oil gained for a third day and investors speculated that higher Malaysian exports in May may have cut the nation’s stockpiles for a fifth month. The August-delivery contract gained 0.7 percent to 2,474 ringgit ($755) a metric ton on the Malaysia Derivatives Exchange, and was up the same quantum for the week as crude oil rebounded. “Crude oil’s recovery bodes well for palm oil,” said Nirgunan Tiruchelvam, an analyst at Royal Bank of Scotland Asia Securities (Singapore) Pte. “Biodiesel is more economical,” he said, referring to blends that can be made with palm oil. Palm oil, used in food and biofuels, lost 4.8 percent in May as crude fell 14 percent on concern that Europe’s sovereign- debt crisis may hurt fuel demand. The most-active crude contract in New York gained as much as 1.1 percent today. Under the European Union’s Renewable Energy Directive, issued in June 2009, the 27 member states are obliged to meet 5.75 percent of their road-transport fuel needs using renewable energy including biofuels by this year, rising to 10 percent by 2020. The EU is the second-largest market for Malaysian palm oil. Crude oil, which fell to less than $70 a barrel on May 26, has rallied to more than $74 a barrel and is set for a second weekly advance. It traded at $74.92 at 6:09 p.m. Singapore time. Official palm oil export and stockpile data from Malaysia may be market-friendly, Ryan Long, a futures trader at OSK Investment Bank, said today. The government’s palm oil board is set to release figures for the month on June 10. He estimates palm oil may trade between 2,480 and 2,500 ringgit a ton next week. Export Demand Preliminary estimates this week from two independent surveyors, Intertek and Societe Generale de Surveillance, showed that exports from the second-largest producer expanded in May, led by purchases by India and China. Shipments increased 13 percent from the previous month to 1.33 million tons, Intertek said on May 31. SGS estimated that there was an 8.6 percent gain to 1.32 million tons. CME Group Inc.’s September-delivery palm oil contract, which is pegged to the Malaysian benchmark price, advanced 0.7 percent to $744.75 a ton, the first weekly gain in three. On the Dalian Commodity Exchange, January-delivery palm oil climbed 0.3 percent to 6,630 yuan ($971) a ton, while soybean oil gained 0.5 percent to 7,596 yuan a ton. --Editor: Ravil Shirodkar To contact the reporter on this story: Claire Leow in Singapore at cleow@bloomberg.net To contact the editor responsible for this story: Jim Poole at jpoole4@bloomberg.net

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