Commodity Blog

Commodity Prices - Oil

Corn futures fell in Chicago today, heading for a second straight weekly loss. May futures for corn delivery dropped $0.0275 (0.8 percent) to $3.625 per bushel as of 9:53 on CBoT.

Crude oil dropped amid falling confidence among U.S. consumers today. Earlier oil prices rose after retail sales went up 0.3 percent. Analysts forecasted that retails purchases will decline 0.2 percent. April delivery for crude oil slid $1.32 (1.6 percent) to $80.79 per barrel by 12:02 on the New York Mercantile Exchange.

Wheat gained on speculation that futures will advance, causing investors, who had bet on price decline, to buy back contracts and to close out positions. Speculative long positions in wheat futures were outnumbered by short positions by as much as 51,195 contracts in the week ended February 16th in Chicago. May futures for wheat delivery added $0.1025 (2 percent) to $5.14 per bushel by 10:16 on the Chicago Board of Trade.

Crude oil gained on signals that fuel demand may rise in the U.S. as economy recovers. Price was also aided by the dollar’s decline against the euro. The number of tankers used as floating storage for crude oil and diesel dropped 20 percent in January. April delivery for crude oil went up $1.70 (2.2 percent) to $79.87 per barrel as of 10:41 on NYMEX.

Wheat futures slid on speculation that the stronger dollar and growing global stockpiles will cut demand for the U.S. grain. U.S. government forecast that world wheat inventories will rise 19 percent to 195.9 million metric tons in the year ending May 31st, the record level since 2002. May futures for wheat delivery slid $0.075 (1.4 percent) to $5.12 per bushel by 10:25 on the Chicago Board of Trade.

Crude oil fluctuated as the dollar rebounded versus the euro, equities rose more than predicted and on speculation about the global economic recovery. U.S. Energy Department reported that U.S. supplies of crude oil rose 1.73 million barrels last week. March delivery for crude oil dropped $0.18 to $76.83 per barrel as of 10:53 on NYMEX.

Cattle futures tumbled from a 15-month record as U.S. wholesale prices for the meat reached a highest in four-weeks, signaling that retailers may slow purchases of beef. Wholesale choice beef rose 0.6 percent to $1.4486 per pound, the highest price since January 20th, as cold weather in the U.S. reduced cattle-weight gains and diminished beef supplies. April delivery for cattle futures subtracted $0.002 to $0.91975 per pound at 11:23 on CME.

Oil gained after forecast about winter storms in the U.S. this week. The National Weather Service is predicting that temperatures will be below average for the next 6–10 days. According to weather forecast Washington temperatures will be 10 degrees Fahrenheit (12 degrees Celsius) below normal as of February 14th, while New York will be 8 degrees below average by February 13th.

U.S. inventories of distillate fuel, including heating oil and diesel, decreased last week after temperatures fell. OPEC governor stated today that global oil supplies are enough to satisfy demand for the first half of 2010.

March delivery for crude oil advanced $0.73 cents (1 percent) to $71.92 per barrel by 11:58 on the New York Mercantile Exchange. March delivery for heating oil rose $0.016 (0.9 percent) to $1.8908 per gallon. March settlement for Brent crude gained $0.61 (0.9 percent) to $70.20 per barrel on ICE. Hedge-funds and other large speculators reduced bets on increasing oil prices for a third week.

Crude oil gained after the report that the U.S. economy improved at the fastest pace in six years, suggesting that demand may increase. Oil rose as much as 1.6 percent as U.S. gross domestic product went up 5.7 percent in the fourth quarter, the best performance since the third quarter of 2003. March delivery for crude oil added $0.71 (1 percent) to $74.35 per barrel as of 10:10 the New York Mercantile Exchange.

Wheat futures slid as the stronger dollar made supplies from the U.S., the largest producer of the grain in the world, less appealing to overseas buyers. The dollar gained 0.5 percent versus the basket of six major currencies. March futures for wheat delivery lost $0.045 (0.9 percent) to $4.825 per bushel at 10:20 on CBoT.

Gold fell in London as the dollar gained, decreasing the metal’s attractiveness as an alternative store of value. The dollar rose on concern that demand for European assets will decrease with Greece’s fiscal problems spreading further, while the U.S. economy advanced more than expected last quarter. Immediate delivery for gold slipped $8.17 (0.8 percent) to $1,078.93 per ounce by 15:17.

Wheat dropped to the weekly low on expectation that U.S. President’s plan to limit risk-taking by banks will cut investment in commodities, including U.S. grain. Barack Obama may announce further details of his plan to restrict proprietary trading or investing in hedge funds and private-equity funds. March futures for wheat delivery decreased $0.045 (1 percent) to $4.8925 per bushel as of 10:08 on CBoT.

Crude oil and gasoline tumbled to the lowest level in five weeks after the report that stockpiles of the motor fuel climbed to a 22-month high. Demand for fuel fell 2 percent compared to the previous year in the four weeks ended January 22nd. Gasoline consumption dropped 0.4 percent from the previous week. Refineries worked at 78.5 percent of capacity. March delivery for crude oil slid $1.05 (1.4 percent) to $73.66 per barrel by the 14:30 on the New York Mercantile Exchange.

In this video ONN’s Kevin Cook and David Hightower from www.futures-research.com talk about the recent developments in the copper stocks and the drawdown in the U.S. oil refinery. Big copper consumers a simply stockpiling copper, while the falling crude refinery rates suggest that in a short-term perspective the economy will continue to decline, pulling the commodities down. But the general supply and demand picture didn’t change much, as the normal supply is still higher than the demand in most commodities, suggesting a long-term bullish picture.

Crude oil tumbled to the lowest in a month in New York on speculation that China will raise interest rates and as equities slid after U.S. President proposed restrictions on risk-taking at financial institutions. Oil also slid this week as the dollar rose, curbing the demand for commodities as an inflation hedge and investor confidence decreased on declines in equity markets.

Fuel consumption in the U.S. fell 1.8 percent in the past four weeks compared to a previous year. Refineries ran at 78.4 percent of capacity in the U.S. last week, the lowest rate since 1989, barring the Atlantic hurricane season. Gasoline stockpiles rose 3.95 million barrels to 227.4 million last week, the record level since March 2008.

March delivery for crude oil dropped $1.17 (1.5 percent) to $74.91 per barrel by 10:15 on the New York Mercantile Exchange. Some analysts think that there shouldn’t be any significant changes in the market in the next few days after decline. But there is probability that crude oil may decline next week as U.S. fuel consumption falls and refineries idle units.

Analysts predict that soybeans imports in China may remain high in March as ”lower costs boost crushing margins”. The margin rose to $46 per metric ton by January 13th. Imports of soybeans in China are expected to reach 4.2 million tons in January causing concern about oversupply.

Some analysts forecast shortages for crude oil as supply is unable to catch up rebounding demand. Worldwide oil consumption will return to pre-crisis level at the third quarter of 2010, while projects for new oil sources are “still lagging as a result of the credit crunch”. Crude oil futures reached $78 per barrel level today in New York.

Demand for steel may drop with lending cuts in China, the biggest consumer in the world. Steel production in China increased 13 percent to 565 million tons in 2009 as demand from builders, home-appliance manufacturers and automakers was boosted by China’s $586 billion stimulus spending. China’s steel output may rise 5 to 10 percent exceeding 600 million metric tons in 2010.

Cotton prices dropped on speculation that the U.S. economy may be slow to rebound, cutting demand for the fiber. Retailer sales in the U.S. unexpectedly declined in December and unemployment is expected to average 10 percent in 2010, indicating that a pace of an economic rebound is slow. March futures for cotton delivery fell $0.0082 (1.1 percent) to $0.7261 per pound as of 11:22 on ICE.

Crude oil tumbled as retail sales fell and jobless claims increased, signaling that the economic recovery is slow. Weekly jobless claims rose as much as 2.5 percent, to the highest level in five weeks. Analysts think that fundamentals may force crude prices down to the $70 per barrel level after the end of the winter. February delivery for crude oil slid $0.26 (0.3 percent) to $79.39 per barrel by 14:30 on the New York Mercantile Exchange.

Cocoa reached the record in almost a month in London on outlook that demand will be supported by increasing usage in Europe. Cocoa usage in the Europe jumped 0.6 percent to 351,316 tons in the fourth quarter and indicator of demand, cocoa grindings, rose as much as 9.4 percent to 95,834.2 metric tons in Germany in the period. March delivery for cocoa added 0.4 percent to $3,403 per metric ton at 17:39 on ICE.