Monday, June 11, 2012
Commodities Turn Lower On Dollar Strength (USO, UNG, GLD, SLV, ROYT, DUK, PGN, ZARA, HES)
Commodities pared its entire gain for the session and turned lower on Monday as the dollar bounced back against the euro despite positive developments over Spain’s crisis.Earlier global markets jumped sharply after euro zone finance ministers agreed to provide Spain up to 100 billion euros ($125 billion) to help its struggling banks. The surprisingly large amount of aid removes a huge cloud that has been hanging over financial markets, with investors fearing that a banking crisis in euro zone's fourth-largest economy could have compounded the currency bloc's troubles with Greece.
After a 2-1/2-hour conference call of the 17 finance ministers, which several sources described as heated, the Eurogroup and Madrid said the amount of the bailout would be sufficiently large to banish any doubts. In the first Greek poll, a large number of voters voted for parties opposed to the country's international bailout. The re-run of Greek elections on June 17 could decide whether the country stays in the euro zone.The dollar index reversed early losses and was up at 82.50 versus 82.439 late Friday. At last check, however, the euro fell -1.1630% traded well off its highs against the U.S. dollar, buying $1.2493 after a high of $1.2647.
United States Oil Fund LP (ETF)(NYSEARCA:USO) was down 0.35 (-1.10%) at $31.45, SPDR Gold Trust (ETF)(NYSEARCA:GLD) fell 0.74 (-0.48%) to $153.99, iShares Silver Trust (ETF)(NYSEARCA:SLV) lost 0.19 (-0.68%) to $27.56 and United States Natural Gas Fund, LP(NYSEARCA:UNG) fell 0.39 (-2.44%)to $15.61.
Light, sweet crude-oil futures for delivery in July was down -0.88% to $83.39 a barrel on the New York Mercantile Exchange, well off session high of $86.64. July futures for gasoline fell -0.29% to $2.68 a gallon and heating oil lost -0.58% to $2.66 a gallon. Natural-gas futures for July delivery plunged -2.52% to $2.24 per million British thermal units.
Gold for August delivery was down -0.43% to $1,584.60 an ounce on the Comex division of the New York Stock Exchange, trading new the intraday low of below $1,584 to mark a reversal from a high above $1,609 during European trading hours. July copper was up +1.45% to $3.33 a pound. July platinum surged +1.28% and traded at $1,443.20 an ounce, while September palladium added $7, or 1.1%, to $619 an ounce.
Pacific Coast Oil Trust(NYSE:ROYT) jumped 0.11% after analyst at Baird started coverage on the stock with an Outperform rating and set a price target of $20. The firm notes that units have lost 12% since ROYT's IPO amid falling Brent crude oil prices but states the company is its top royalty trust under coverage with 24% total return potential.
Duke Energy Corporation(NYSE:DUK) says it considers new conditions imposed by federal regulators on its planned takeover of Progress Energy, Inc.(NYSE:PGN)as a positive development that would allow it to close the deal by the July 1 target. The FERC on Friday cleared the way for the $13.7B deal but added conditions, including asking for periodic reports on the status of transmission upgrades. Shares of PGN are up over 3.3% to $60.07 and DUK slid slightly.
ZaZa Energy Corp(NASDAQ:ZAZA) soared over 30% after r announcing it will receive an immediate $15M payment to end an agreement with Hess Corp.(NYSE:HES) to explore and develop the Eagle Ford shale formation, agreeing to pay down $100M senior secured notes due 2017 by $33M, and engaging Jefferies to lead a JV process for ZaZa's Eagle Ford core and Woodbine/Eaglebine assets.