KUALA LUMPUR, Dec 5: Malaysian crude palm oil futures ended 0.7 per cent higher on Wednesday as investors piled back into the market, heartened by crude markets that rose on a crude oil cartel’s decision to keep output levels unchanged.

But gains were limited as some financial players hung back, spooked by a gloomy outlook for palm supplies and exports, traders said.

The palm oil market, which tracks crude oil prices because of its increasing use as feedstock for biofuel, is now 5.1 per cent off a record high of 3,068 ringgit set last week.

The benchmark February contract on the Bursa Malaysia Derivatives Exchange settled up 21 ringgit at 2,910 ringgit ($871).

Palm oil is a direct beneficiary of Opec’s decision and it’s set to become stronger but more and more players are taking notice of the local fundamentals of rising supplies and weaker demand, said a dealer with a commodities trading firm.

There will be a rise but it will remain muted by the end of the year. Other traded months rose between 5 and 18 ringgit.

Overall trade stood at 12,863 lots of 25 tons each.

Oil rose on Wednesday after Opec decided to keep output levels unchanged, rebuffing consumer country calls for more crude to rein in prices now near $90 a barrel.

The Organisation of Petroleum Exporting Countries also agreed to meet again at the end of January to review its decision ahead of a regular March gathering, Nigerian Oil Minister Odein Ajumogobia told Reuters.

Palm oil, used in products ranging from instant noodles and mascara to biodiesel, is up nearly 46 per cent this year.

Malaysian market players have started to focus on bearish demand-supply fundamentals after getting direction solely from the crude oil markets in the recent weeks, traders said.—Reuters