Here is a quick daily summary for yesterday, December 13th for Major Commodity daily prices:
The week started with a bang as major commodities not rising but jumping high, this after last week ended with moderate declines. The most impressing rises are New York City Gate Spot prices followed by Silver prices, so let’s start:
After last week’s staggering rise of natural gas prices –New York City Gate Spot, by 61%, yesterday it had another staggering rise, this time by 105%!!!, i.e. the price of NY spot doubled yesterday, settling on 12.31 $ MMBTU.
It seems that the cold weather has a much more effect on natural gas spot prices then we might think, and affects the volatility of these prices. There has been a colder weather then usual according to the EIA report, which might explain the reason for the high increase. Nonetheless, there is no shortage in natural gas and even as consumption is rising (as I have reviewed in a previous post), it still not in the magnitude which could explain this recent rise. To speculate, it could be because of the cold weather front in Florida which also experienced the highest increases in natural gas prices according to the last EIA repot.
According to Bloomberg: “As in Florida, it is not unusual for prices in the Northeast to spike during cold weather. Last year, the Transco Zone 6 New York City delivery point price ranged from $4.94 per MMBtu to $10.18 per MMBtu, and rose above $14 per MMBtu twice in January, when temperatures typically drop lower.”
Natural gas prices showed a much moderate fluctuations as the Nymex Henry Hub Future Prices (futures for January) didn’t change, while Henry Hub Spot rose by 4.15%.
Silver prices are the second commodity with high increase (although nowhere near NY NG) as it rose yesterday by over 3.5%, while Gold prices rose by nearly one percent.
Silver prices and Gold rising after last week’s downfall, is part of multi year trend of both of these commodities rising mainly because of investors looking at these metals, especially gold, as a safe haven; even though Gold’s demand showed a significant rise in 2010 compared to 2009, I think it’s still overpriced…however, as long as investors won’t have a good reliable investment alternative (e.g. government bonds) these metals’ prices will continue to rise.
Crude oil prices after last week’s moderate fall, it bounced back to start the week with WTI crude oil prices rising by 0.93%, and settling at 88.61 USD/b while Brent crude oil rising, and is still hovering above the 90 USD/b marks, by 0.65% and settling at 90.75 USD/b.
According to Bloomberg, OPEC is planning to increase its production in 2011as it did in the past year; this, despite OPEC officials saying it won’t change its quotas in 2011 in the last OPEC meeting on Saturday which I have covered in a previous post. According to Bloomberg, the current OPEC production is at 26.78 million barrels a day while its quota was supposed to be 24.85 million barrels a day. Since the demand is on the rise as listed on the IEA (international energy agency) in its November report, it is reasonable to assess that if the quotas won’t increase in 2011, the crude oil prices will expect to rise.
Furthermore, Bloomberg also claims that the current increase in crude oil prices was due to the news about China’s oil refineries working at record high rates last month, according to a recent government report.
And finally, the EURO/ US dollar continue to zigzag this time it increased by 1.25% as the Euro strengthens compare to the USD.
In the following table are the main descriptive data from last business day – December 13th including: settled prices, the daily percent change compare to previous business day, and the quantitative change in US dollars of each of these prices and exchange rates (except for USD/CAD, in which the change is in Canadian dollars):
For further reading: