Thursday, June 14, 2012
Commodities Up Slightly, Natural Gas Soars 8% (USO, UNG, GLD, SLV, PBR, MRO, HES)
Commodities were trading with modest gain on Thursday as the recent economic data bolstered hopes of further stimulus action from the Federal Reserve. The U.S. dollar turned down after the report, with the dollar index, a measure of the greenback against a basket of six major currencies, edged down to 81.99 from 82.126 late Wednesday.
The FOMC, the policy-setting arm of the U.S. central bank, meets June 19-20 in Washington.
Earlier Thursday, the government said that first-time applications for jobless benefits rose by 6,000 to a total of 386,000 last week and that consumer prices in May fell 0.3%, the sharpest drop in inflation at the retail level in nearly three years.
Prices of July natural gas soared 8% at $2.35 per million British thermal units. The Energy Information Administration reported that inventories of the commodity rose less than expected, by 67 billion cubic feet for the week ended June 8. Analysts polled by Platts expected the report to show a climb of between 71 billion cubic feet and 75 billion. Total stocks now stand at 2.944 trillion cubic feet, up 708 billion cubic feet from the year-ago level and 666 billion cubic feet above the five-year average, the government said.
July futures for light, sweet crude-oil was up +0.16to $82.72 a barrel on the New York Mercantile Exchange. The OPEC meeting in Vienna comes amid concern that slowing global growth could curb demand for oil and ahead of the official July 1 start of the European Union’s sanctions on Iran, which could hurt global supplies. Angola’s Oil Minister Jose Maria Botelho de Vasconcelos said ahead of the OPEC meeting that members will likely agree to maintain their current output ceiling. During the opening address for the conference, which began earlier, Adbdul-Kareem Luaibi Bahedh, minister of oil of Iraq and President of the conference, referred to the overall economic outlook as “fragile” and said that there is a “disturbing level of [oil] price volatility.”
However, Gold for August delivery fell -0.16% to $1,617 an ounce on the Comex division of the New York Stock Exchange, retreating from a high of $1,629. Silver for July delivery slumped -1.85% to $28.40 an ounce. July platinum was up +1.17% to $1,484 an ounce, while September palladium lost 45 cents , or 0.1%, to $622.85 an ounce.
United States Oil Fund LP (ETF)(NYSEARCA:USO) was up 0.06 (0.19%) at $31.16, SPDR Gold Trust (ETF)(NYSEARCA:GLD) fell 0.16 (-0.10%) to $156.58, iShares Silver Trust (ETF)(NYSEARCA:SLV) fell 0.42 (-1.50%) to $27.59 and United States Natural Gas Fund, LP(NYSEARCA:UNG) climbed 1.13 (7.42%) to $16.36.
Petroleo Brasileiro SA (ADR)(NYSE:PBR) fell 2% as it plans to boost its investments over five years to $236.5B, a 5% increase from its previous investment plan, with 60% spent on exploration and production as Brazil's state oil company aims to "recover the production curve for oil and natural gas." PBR targets 5.7M bbl/day of oil and gas production worldwide by 2020, 91% from Brazil.
Shares of natural gas producer jumped Marathon Oil Corporation(NYSE:MRO) added 1.14% and Hess Corp.(NYSE:HES) surged 1.20%.