Natural gas prices rising as we progress into the winter – news update for December 2nd

Crude oil prices continue to rise and many already blur out the 100 USD/b mark as a feasible price for crude oil. Bloomberg already posted that in preparation for the OPEC meeting in nine days from today they won’t increase their quota for next year, i.e. if the crude oil prices will reach  and surpass the 100 USD/b in the next couple of weeks so be it.

Natural gas prices continue to rise, and as we are progressing into the winter it will probably continue to rise. Notice that historically, Natural gas prices are seasonally sensitive, and during winter months their prices are, on average higher then during summer time.

The same is true for propane prices as they are increasing in the US, and currently the average US propane price reached 2.58 USD per gallon, a $0.02 per gallon incline from last week. On the other hand, there was an increase in Propane inventories in the US, from last week by more then 1.14 million barrels, which is a 1.8% increase, and thus reaching over 65 million barrels.

Gold prices and Silver prices continue to increase as the year progresses, and while some of it is due to the increase in gold consumption, mainly in China and India, it still seems that investors might be too bullish on these commodities.

Yesterday, December 1st the EIA published its weekly report on energy commodities, so here is a quick review of the main inputs the EIA report has to offer:

Stocks:

After last week’s small rise in crude oil stocks, this week the report showed another rise of 0.1% in the stocks, which is an increase of over 1.06 million barrels of crude oil. This means that for consumption purposes, it seems that there won’t be a lack of crude oil as the winter in the US will progress, and thus the consumption shouldn’t have a strong pressure on crude oil prices to rise in the US. This could explain the drop in average retail price for gasoline which decreased by 2 cents a gallon from last week to $2.86 per gallon, which is however, 0.23 USD per gallon higher than last year’s same time.

On the other hand, there was a drop in Finished Motor Gasoline stocks after last week’s rise. Currently the stocks are at 68 million barrels, the lowest levels in the past 20 years. This was partially the result of many refineries in Northeast of America and Canada shutting down due for maintenance repairs until the beginning of November. Apparently there are still some lingering effects. Another reason could be that more crude oil is allocated into other energy products then gasoline, such as propane.

Prices:

Here is an update on the prices of main energy and precious metals commodities for December 2nd:

Energy

The crude oil price of short term futures (Nymex) – delivery for January 2011, as of 16.26PM GMT, on the New York Mercantile Exchange, is currently traded at 87.24 USD per barrel, which represents a 0.49 USD/b  increase or a 0.56 % rise.

The Dated Brent spot crude oil is at 89.15 USD per barrel – a 0.59 USD per barrel increase as of 16.37PM GMT.

The WTI spot price is trading as of 13.58PM GMT at 86.67 USD per barrel, a rise of 1.63% compare to the previous business day’s rate.

Natural Gas future price, much like crude oil is still rising, and this time at least doing so moderately for now. Natural Gas prices (the Nymex Henry Hub Future) are currently traded as of 16.27 PM GMT, at 4.28 $ MMBTU (one million BTU), a 0.35% increase.

Precious Metals

Investors are still very bullish on Gold prices today are still on the rise. In particular, gold short term January delivery future (Gold 100 oz.) is currently traded at 1,397.3 USD /t. oz., a moderate 0.65% rise or 9 USD /t. oz. at 16.47 PM GMT.

Silver prices, also as Gold prices, are rising, and as of 16.47 PM GMT is being traded at 28.965 $/t oz. a moderate 1.94% increase or 0.552 $/t oz.