According to the World Bank, the G3 countries (US, Japan and Germany), experience a decline in demand for their government bonds. This information could explain some of the recent rise in prices, as major commodities such as Crude oil, Gold and Silver are traded as a source of investment.
The biggest news seems to be the natural gas prices explosive rise, which I have covered earlier today;, however, for now, despite the NY city gate increase in its price yesterday (over 60%!), the nymex future prices, don’t resemble any increase, and show a drop in its prices. Some of the increase could be related to the winter time consumption, however this sharp rise in the spot prices seems to me too high to be just related to winter consumption. Tomorrow, the EIA will present its report about natural gas stocks and could shed some light on the subject; however, I doubt that there will be any big news. Last week (3/12) there was a drop in underground storage of natural gas by 2.3% – a very reasonable decline for the season.
Crude oil price continue to fluctuate with no apparent trend; as for now, there is a small rise in WTI spot price and a small fall in Brent. According to Bloomberg, this recent fluctuation could be because of the small improvement in U.S. economy as jobless claims drop. In any case, according the EIA oil report, there is no rise in demand for crude oil in the US and since inventories, as seen herein, is high on a multi year level, despite showing a fall in recent time; there is no reason for demand pressures to drive petroleum prices up.
After last week’s small rise in crude oil stocks, this week the report showed a fall of 0.3% in the stocks, which is a drop of over 5.3 million barrels of crude oil. This big drop is understandable as there is an increase in consumption of energy throughout the US for heating purposes. According to this week’s EIA report, they back up this rise in consumption by the increase in heating oil by 0.09 USD/g, and reaching an average of 3.2 USD/g, which is 0.48 USD/g higher then last year’s price.
After several weeks of Finished Motor Gasoline stocks showing a downward trend, mainly because of the maintenance repairs in major refineries throughout the US and Canada, last week it bounced back as major refineries pushed back their production. As a result the stocks rose by 2.2% and 1.5 million barrels reaching 69.5 million barrels.
In general the entire Stocks of Total Gasoline rose by 1.8% and 3.8 million barrels, and reaching 213 million barrels.
The rise in consumption in Propane is also noticeable in stocks and Prices:
The Propane stocks, after rising last week, experienced a big fall of 2.3 million barrels which is a 3.5% decline, reaching 63 million barrels.
Propane prices shot up last week by 0.02 USD/g reaching 2.6 USD/g – an increase of 0.26 USD/g compares to last year’s price over the same period (2.34USD/g).
As the winter will progress we will probably continue to see this rise in heating oil and decline in stocks.
Here is an update on the prices of main energy and precious metals commodities for December 9th:
The crude oil price of short term futures (Nymex) – delivery for January 2011, as of 17.42PM GMT, on the New York Mercantile Exchange, is currently traded at 88.40 USD per barrel, which represents a 0.12 USD/b increase or a 0.14 % rise.
The Dated Brent spot crude oil is at 90.76 USD per barrel – a 0.15 USD per barrel decrease as of 17.53PM GMT.
The WTI spot price is trading as of 17.09PM GMT at 88.31 USD per barrel, a small rise of 0.03% compare to the previous business day’s rate.
Natural gas future price (the Nymex Henry Hub Future) is currently traded as of 17.42 PM GMT, at 4.48 $ MMBTU (one million BTU), a 2.82% decrease.
Investors seem to flip flop on gold prices as their prices show one day rise and another day fall. In particular, gold short term January delivery future (gold 100 oz.) is currently traded at 1,390 USD /t. oz., a moderate 0.5% increase or 6.9 USD /t. oz. at 17.13 PM GMT.
Silver prices, much like gold prices, are increasing, and as of 17.12 PM GMT are traded at 28.77 $/t oz. a 1.83% increase or 0.518 $/t oz.
For further reading:
- Crude oil prices touching 90 USD/b – Weekly recap 29th Nov to 3rd of Dec (in this site)
- The Golden Rule – gold price is going up… – weekly recap of Gold and Silver – Dec 4th (in this site)
- A monthly recap of Natural gas prices and Crude oil prices for November 2010 (in this site)
- Is it the season of the Natural gas prices rise? – Examining the seasonality in Natural gas prices (in this site)