Commodity Blog

Commodity Prices – Gasoline

Crude oil declined on the speculation the growing US fuel inventories and the signs of the global economic slowdown will decrease demand for fuel. The report of the Energy Department showed the gasoline stockpiles increased by 1.9 million barrels last week. Analysts predict that the government report today will show the industrial production almost stalled last month. October futures for delivery of crude oil fell $0.59 to $88.32 per barrel on NYMEX before trading at $88.68.

Corn fell as ethanol production in the US slowed, reducing demand. The report of the Energy Department showed the production in ethanol rose 6.9 percent in the first five month of 2011, compared with the 29.7 percent in the same period of 2010. The US Department of Agriculture predicted the global consumption of corn will fall to 505.1 million metric tons in September from 510.09 million tons in August. Contract for delivery of corn in December dropped 0.8 percent to $7.1875 per bushel on CBoT.

Crude oil continued to decline today as a government data showed that US inventories of gasoline rose more than predicted. Gasoline stockpiles increased 3.29 million barrels to 218.1 million last week, while they were expected to grew by 0.5 million barrels. February delivery for crude oil slipped $0.93 (1 percent) to $88.45 per barrel by 10:35 on NYMEX.

Corn and soybeans gained today on prediction that dry weather in Argentina and Brazil will diminish output. Forecasts promise that unfavorable weather will persist for about 10 days. March futures for soybean delivery gained $0.24 (1.8 percent) to $13.935 per bushel as of 13:15 on CBoT. March futures for corn delivery advanced $0.1075 (1.8 percent) to $6.1925 per bushel.

Natural gas declined today as specialists predicted that temperatures in the US will be in normal range next week. Previously gas climbed on anticipation of colder-than-normal winter. February delivery for natural gas dropped $0.196 (4.2 percent) to $4.473 per million British thermal units on NYMEX.

Crude oil slipped today as US gasoline inventories surged and the dollar strengthened. Gasoline stockpiles in the US, the biggest consumer of oil, advanced 5.6 million barrels last week. February delivery for crude oil dropped $0.48 cents (0.5 percent) to $88.90 per barrel on NYMEX.

Rubber also declined on a stronger dollar. Another reason for the decline was the profit-taking after prices surged to the record. June delivery for rubber slid 1.7 percent to 419.1 yen per kilogram ($5,102 per metric ton) on the Tokyo Commodity Exchange.

The commodity sell-off affected gold too, causing the spot price to decline 0.2 percent to $1,378.18 an ounce.

Crude oil advanced to more than $77 per barrel to the highest in a year in New York after a report that U.S. gasoline stockpiles fell as refineries idled units for maintenance. Refineries operations dropped to 80.9 percent of capacity, the lowest since April. As the result, inventories of the motor fuel slumped to 5.23 million barrels last week and gasoline output slid 10 percent.

Refiners usually idle units for repairs and upgrades in October, when demand for gasoline is lower, and before heating-oil use increases. Yet 4.1 percentage point drop in refinery utilization rates last week was the biggest since September 2008. The report was definitely bullish for the oil products.

Another reason for the oil prices increase is global economic recovery. As example of the recovery can be considered the fact that the increase for the cost of living in the U.S. was slower in September.

November delivery for crude oil futures advanced $1.73 (2.3 percent) to $76.91 per barrel by 13:05 on NYMEX. November settlement for Brent crude oil gained $1.04 (1.4 percent) to $74.14 per barrel on ICE Futures Europe exchange.

Oil and gasoline gained today with signs of increasing industrial activity. Good economic prospects cause rebound of fuel demand leading to increased oil and gasoline prices. September delivery for crude oil gained $2.11 (3 percent) to $71.56 per barrel by 11:08 on NYMEX. September delivery for gasoline raised $0.0541 (2.7 percent) to $2.0667 per gallon in New York.

Copper jumped more than 4 percent to 10-month high. As U.S. and Chinese manufacturing are experiencing recovery speculation are rising on increasing demand for industrial materials. September delivery for copper went up $0.1095 (4.2 percent) to $2.733 per pound as of 11:40 on the New York Mercantile Exchange’s Comex division.

Gold rises to the highest in almost two months as dollar weakens today. Tendency for gold to rise when dollar falls causes gold to gain as dollar weakens and demand for the metal as alternative investment increases. December delivery for gold raised $7 (0.7 percent) to $962.80 per ounce at 12:51 on the New York Mercantile Exchange’s Comex division.

Copper went up in New York today. Demand for metals used in construction and automobiles rises because of recovering economies making copper go up in New York and London. September futures for copper gained $0.0045 (0.2 percent) to $2.4735/pound at 8:28 on the Comex division of the New York Mercantile Exchange.

Gold may go up as a declining dollar rises demand for the metal as an alternative investment. The dollar fell 1.7 percent against the single European currency while gold futures gained 2.4 percent this month. August futures for gold gained $1.60 (0.2 percent) to $950.40/ounce on NYMEX by 8:32.

Crude oil and gasoline rises today as earnings cause contraction to stop. Earnings at Caterpillar Inc. was better than expected potentially making contraction to stop in the world’s biggest fuel-consuming country resulting in rise of crude oil rose and gasoline. Futures reached $65.53, the highest since July 6th. Crude oil for August delivery gained $0.86 (1.3 percent), to $64.84/barrel as of 10:23 on NYMEX.

Friday’s one-day gain of $10.75 for crude oil was the biggest daily gain in history, and Thursday’s gain was the second biggest. This has pushed gasoline prices up over $4.00 gallon.

Last year at this time crude oil was around $66.00 barrel. Fridays close was a new record and put oil above $139.00 barrel.

What does this mean for Forex traders….how commodity prices affect currencies.