Commodity Blog

Posts Tagged ‘Mexico’

Crude oil gained today on concerns that the disturbance in the Gulf of Mexico would turn into a tropical cyclone. The output from the region has already declined by about 36.9 percent for and 18.1 percent for natural gas. Analysts expect that the report tomorrow will show that US inventories of crude decrease by 2 million barrels last week. October futures for delivery of crude oil gained $3.32 to $89.34 per barrel on NYMEX, posting the biggest advance since August 10.

Gold slipped today as gains of stocks reduced demand for metal as a safe haven and prompted traders to take profit from record prices. The Standard & Poor’s 500 Index surged 2.7 percent and the MSCI All-Country World Index jumped as much as 2.8 percent. The precious metal also retreated after the dollar climbed to the highest level in more than a month against the basket of six major currencies. December futures for delivery of gold retreated $55.70 (3 percent) to $1,817.60 per ounce as of 13:25 on COMEX. December futures for silver slipped $0.237 (0.6 percent) to $41.631 per ounce.

Crude oil jumped to the highest level in four weeks today in New York as energy companies evacuate platforms from the Gulf of Mexico on forecast that a storm may develop in that area. The National Weather Service increased probability that a tropical storm will develop in the area in the next two days from 60 percent to 80 percent chance today. Worries about potential disruption of oil supplies made prices surge. October futures for delivery of crude oil rose $0.12 to $88.93 per barrel on NYMEX, the highest settlement prices since August 3. October futures for Brent crude fell $0.56 (0.5 percent) to $114.29 per barrel on ICE.

Copper fell as manufacturing in China, the biggest consumer of the metal in the world, expanded less than predicted. China’s Purchasing Managers’ Index, according to the China Federation of Logistics and Purchasing, was at 50.9 in August, while forecasters promised it to be at 51.2. Traders become concerned as manufacturing in Asia and Europe slows. Futures for delivery of copper in December fell $0.044 (1 percent) to $4.1605 per pound by 13:00 on COMEX.

Oil prices were heavily hit by the economic recession in 2008, but now they are rapidly rebounding. Will this trend continue in the next years?

In fact, analysts expect the so-called Oil Peak. Global production probably isn’t ready to satisfy quickly growing demand. While developed countries are expected to keep their consumption of oil on stable level or even experience a slight decline of demand, developing countries, primarily China and India significantly accelerate the rate of their consumption, leading to noticeable jump in the global demand in coming years. China’s oil demand has increased 28% over a year by January 2010. In the same time, any noticeable increase of production isn’t expected. OPEC considers their current level of production in target range and isn’t planning to expand it. There is expected an increase of output from Non-OPEC producers, but it’s unlikely that their supply will be enough to satisfy the ever-growing demand. New sources of oil, like findings in Brazil, Columbia and Mexico looks perspective, but it may take a lot of time before the actual drilling will begin.

The growth of oil prices may be not very noticeable in the next two years as the economies worldwide are struggling to recover. Crude oil prices averaged $84 per barrel in April 2010. Oil prices will average about $84 per barrel over the second half of 2010 and rise to $87 by the end of 2011. By 2015 consumption should exceed supply by 10 million barrels per day (MBD). By 2030 the global demand will reach 118 MDB, while producers will be able to supply only 110 MBD. Barring any unexpected major occurrence, like developing and implementing some new sort of fuel instead of conventional gasoline and diesel fuel or significant easily accessible find, by 2030 crude oil price will soar above $100 per barrel level, maybe even jumping as high as $150 per barrel.