The week started with most major commodities rising, including Gold prices, Silver prices and Crude oil prices.
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.
Gold and Silver prices are rising after last week’s downfall, which 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 increase in 2010 compared to 2009, I think it’s still at a high level…consider the following as a low tech experiment: go to any gold store and try to sell an ounce of gold at 1,400 USD you will be lucky to get 1,200 USD for it…
There is an article on this subject in FT and the bottom line is that as long as investors won’t be have a good reliable investment opportunity (e.g. government bonds) these metals’ prices will continue to rise.
Here is an update on the prices of main energy and precious metals commodities for December 13th:
The crude oil price of short term futures (Nymex) – delivery for January 2011, as of 17.21PM GMT, on the New York Mercantile Exchange, is currently traded at 88.19 USD per barrel, which represents a 0.4 USD/b increase or a 0.46% rise.
The Dated Brent spot crude oil is at 90.51 USD per barrel – a 0.35 USD per barrel increase as of 17.31PM GMT.
The WTI spot price is trading as of 16.57PM GMT at 88.41 USD per barrel, a rise of 0.71% compare to the previous business day’s rate.
Natural Gas future price (the Nymex Henry Hub Future) is currently traded as of 17.21 PM GMT, at 4.41 $ MMBTU (one million BTU), a small decrease of 0.07%.
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 1,395 USD /t. oz., a moderate 0.78% increase or 10.8 USD /t. oz. at 17.19 PM GMT.
Silver prices, much more than Gold prices, are sharply rising, and as of 17.18 PM GMT are traded at 29.6 $/t oz. a whopping 3.48% increase or 0.995 $/t oz.
For further reading:
- How related are the consumption of Natural gas to its price – Examining Natural gas (in this site)
- 158th OPEC meeting decisions and analysis – 11th of December (in this site)
- Weekly outlook for Crude oil, Natural gas, Silver and Gold, 13th – 17th of Dec (in this site)
- Gold Makes Record Run (in the site oilprice.com)