Here is your weekly recap for the week ended on December 3rd for crude oil prices and natural gas prices:
As stated before, Europe Brent spot price has reached and passed the 90 USD/b mark, while the rest of the crude oil prices are on their way as they settled at the 89 USD/b mark. I think, that part of the reason for this price increase, could be attributed to the anxiety of investors in preparations for the 158th OPEC meeting, in Quito, Ecuador on December 11th.
Some attribute this rise to the risk in investing in the US economy, followed by the unappealing reports about its economy as claimed by Bloomberg. Others are considering that the risk in many European countries is also on the rise as I have showed in a recent post. Thus, it’s reasonable to consider that these economies will affect investors to fall back on major commodities to invest in, such as crude oil and gold.
Further, there is an apparent uncertainty behavior of investors as they flip flop between the Euro and USD – the EURO/USD fell at the beginning of the week, reaching as low as 1.2983, and by the end of the week bouncing back to 1.3415. This could be fueled due to Ben Bernanke’s statement that he will consider expanding the recent quantitative easing program to more then 600 billion USD that was originally planned, if needed. This could make the USD even less attractive and thus more will consider investing in commodities.
More analysis to come as the week will progress…
On the other hand, Natural gas prices are rising very sharply, for the spot prices at least, however the future prices (Nymex Henry Hub Future Prices) suffered a tumble at the beginning of the week. This could be attributed to investors considering a fall in the near future of natural gas prices, by the time the winter temperatures will drop in Europe and US, and will decrease the usage of natural gas for heating.
The table above shows high ranges for crude oil prices such as the WTI crude oil price between 84.12 $/b and 89.19 $/b – a range of 5.07$/b, which is nearly double the range spread from last week. This fluctuation represents an increase in the level of volatility of crude oil price compare to last week and also a rise of nearly 5.2 percent in the average price of this week compare to last week’s average price (for WTI).
On average, the spot price of WTI changed daily by 1.25% and its price increased by 4.04% from the beginning to the end of the week.
In regards to Natural Gas prices, there is a more complex change: while the prices of the futures (Nymex Henry Hub Future) tumbled at the beginning of the week by more then 4% compare to last week, while the spot prices (such as Henry Hub Spot) rose by nearly 9% for the same day…That is why the average price for this week for the future prices is 0.7% lower than last week’s average, while the spot prices rose by nearly 8% compare to last week’s average.
* This figure is calculated based on the percent change from the price at the beginning of the week compare to the price at the end of the week
The following graphs show the changes of WTI spot price, Europe Brent spot price and NYMEX future prices:
In the final graph it shows the crude oil prices and natural gas price (Nymex Henry Hub Future Prices) daily percent change ranging between an almost 4 percent decline to Nymex Henry Hub Future Prices at the beginning of the week, and a 3 percent increase at the middle of the week toEurope Brent spot price & NYMEX future prices .