Monday, June 4, 2012

Commodities Off Session Low, But Still Down (USO, UNG, SLV, GLD, CHK, LNG)

Commodities slid to multi month low on Monday, but came off session low on short covering as the recent jump in the dollar against euro had put severe pressure on the entire commodities pack.July futures for light, was down -0.25% to $3.02 a barrel, well above session low of $81 a barrel. Last week, oil ended lower by 8.50%.The day’s losses also came after data pointed to weakness in China’s services sector. The nonmanufacturing Purchasing Managers’ Index for May dropped to 55.2 in May from 56.1 in April, marking its lowest reading since the seasonally-adjusted figures were introduced in 2011, according to China Federation of Logistics and Purchasing and China’s National Bureau of Statistics.

Among other energy products, the July futures for gasoline fell -0.40% to $2.65 per gallon and those for heating-oil lost -0.64% to $2.61 per gallon.Natural-gas futures for delivery in the same month rose +3.27% to $2.40 per million British thermal units.Gold retreated by 0.52% to $1,614.50 an ounce after soaring about 4% in the previous trading session supported by safe haven buying.Among other metals, platinum for July delivery was down -0.24% to $1,429.80 an ounce. July silver fell -1.32% at $28.14 an ounce, while July copper was up +0.57% to $3.33 per pound.
Orders for goods produced in U.S. factories decreased 0.6% in April, the Commerce Department said Monday. Economists polled by MarketWatch had expected a rise of 0.1%.There are reports that European officials were coalescing around specific strategies to contain the euro debt crisis.The Wall Street Journal reported that Germany has signaled it may be willing to embrace ideas it has so far opposed — such as common euro-zone bonds and mutual support for European banks, if other European nations in turn give up more sovereignty to European Union institutions.

United States Oil Fund LP (ETF)(NYSEARCA:USO) was down 0.17 (-0.54%) at $31.27, SPDR Gold Trust (ETF)(NYSEARCA:GLD) fell 0.99 (-0.63%) to $156.51, iShares Silver Trust (ETF)(NYSEARCA:SLV) lost 0.41 (-1.48%) to $27.21 and United States Natural Gas Fund, LP(NYSEARCA:UNG) rose 0.51 (3.15%) to $16.69.
Chesapeake Energy Corporation(NYSE:CHK) jumped 3.66% to $16.15. The company agreed to replace four members of its nine-member board with candidates proposed by the embattled oil-and-gas company's two largest shareholders, Southeastern Management Co. and activist investor Carl C. Icahn. The shakeup comes as Chesapeake grapples with mounting debt, a string of corporate-governance controversies and weakened natural-gas prices. The move drew praise from Wall Street, with Simmons & Co. analysts calling the effort "a positive step in the right direction."
Cheniere Energy, Inc.(NYSEAMEX:LNG) slumped 10.71% to $11.25 may be the company of the future but it's falling quickly in the present, according to an analysis by David White. The company's shares reflect the promise of its planned liquefied natural gas export terminals, but it's taking on huge debts at a time when most peers are cutting back; shares could "easily fall to $5 or below."

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