Note the NG and Palladium news.
Gas News
Mon, 04 Dec 2000, 7:00pm EST
12/04 17:53
U.S. Commodities: Natural Gas, Heating Oil Surge on Cold Spell
By Mark Shenk
New York, Dec. 4 (Bloomberg) -- Natural gas soared to a record and heating oil also surged on forecasts for frigid U.S. weather at a time of low inventories.
Temperatures in Chicago, the heart of the nation's biggest market for gas heat, will fall to 5 degrees below zero Fahrenheit (minus 21 Celsius) this weekend and maybe lower, forecasters said. The frigid weather is expected to spread to the Northeast, heating oil's top market. The cold would come with gas supplies down 17 percent from a year ago and heating oil down 24 percent.
``If you put together the forecasts for colder weather with the low inventories so early in the season, you have got an explosive mixture,'' said Michael Fitzpatrick, a trader at Fimat USA Inc. in New York.
In other markets, orange juice futures jumped and palladium surged to a record. The Bridge-Commodity Research Bureau index rose 3.18 to 231.84, and the energy-weighted Goldman Sachs Commodity Index rose 2.46 to 252.39.
Natural gas for January delivery rose 76 cents, or 11 percent, to $7.433 per million British thermal units on the New York Mercantile Exchange. Prices rose 19 percent to $7.95 during the session, the highest price and biggest one-day gain in 10 years of trading on the Nymex.
Natural gas prices rose 47 percent last month and have more than tripled from a year ago.
Contributing to the rally was buying by utilities, which are trying to conserve inventories to meet peak demand during the winter months, said Jim Ritterbusch, president of Galena, Illinois- based energy consulting firm Ritterbusch & Associates.
``This early in the season, storage is treated like gold, and they don't want to tap into inventories too aggressively,'' he said.
Temperatures will be below normal in the western two-thirds of the U.S. during the five-day period beginning Sunday, the National Weather Service said late today.
``When this arctic system arrives, we will see the coldest temperatures in six years,'' said David Tolleris, a meteorologist and owner of Windsong Forecast in Richmond, Virginia. ``We could see blizzards with two feet of snow in parts of the Midwest.''
Heating oil for January delivery rose 3.76 cents, or 3.9 percent, to $1.0084 a gallon on the on the Nymex. Prices are up 50 percent from a year ago.
Temperatures throughout the U.S. Northeast, the largest heating oil market, will be between 3 and 10 degrees Fahrenheit below normal through next Monday, according to Weather Services Corp. of Lexington, Massachusetts.
U.S. gas inventories fell 5.5 percent to 2.502 trillion cubic feet, the American Gas Association said in a weekly report last Wednesday.
U.S. heating oil inventories rose about 2 percent, the American Petroleum Institute reported Tuesday. The API will release figures for fuel inventory levels for last week after trading ends tomorrow.
Orange Juice
Orange juice futures soared 9 percent, the biggest gain in more than a year, as forecasts for frigid U.S. weather raised concern that Florida's crop, the nation's biggest, might be damaged by frost.
Frigid Midwest weather next week may dip into Florida a week later, forecasters said. Any freeze would come at a time when some growers say dry weather has already left fruit smaller than normal, which could reduce juice yields during the harvest.
``It looks like there's a freeze potential,'' said Kevin Sharpe, an orange juice broker at Basic Commodities Inc. in Winter Park, Florida.
Frozen concentrated orange juice for January delivery rose 7.1 cents to 86.3 cents a pound on the New York Cotton Exchange, the highest closing price since June 27 and biggest one-day gain since August of 1999. Prices have climbed 25 percent from a three- year low of 69.25 cents on Oct. 12.
Temperatures have the potential to reach from zero to 15 below zero Fahrenheit in Kansas, with the colder-than-normal temperatures expected to move east, said Joel Burgio, a meteorologist at Weather Services Corp. in Lexington, Massachusetts.
``It will come eastward, but whether it's southeastward into Florida, that's hard to say,'' Burgio said. ``At least the potential is there.''
The U.S. Department of Agriculture in October pegged the crop at 240 million boxes, 3 percent larger than last season's output. The department will issue an update next Tuesday. Each box weighs 90 pounds.
Palladium
Palladium jumped to a record, leading platinum to a 13-year high, as industrial consumers bought the metals to protect against possible delays of Russian exports early next year.
Russia has limited deliveries of the metals at the start of each of the past four years as the government delayed issuing export licenses, and RAO Norilsk Nickel, the world's biggest palladium producer, restrained shipments to keep prices high. The $5.5 billion platinum and palladium market uses the metals for everything from jewelry to automotive exhaust systems.
``Everybody is a bit scared that Russian selling won't come early next year, so people tend to accumulate the metals now,'' said Ralf Drieselmann, head of precious metals trading at Frankfurt-based autocatalyst maker Degussa-Huels AG. ``I don't see any (price) resistance levels now -- only blue skies.''
Palladium for March delivery rose $40.40, or 4.8 percent, to $880 an ounce on the New York Mercantile Exchange. The contract rose to a record $890 during the session.
Platinum for January delivery rose $10.10, or 1.7 percent, to $622.10 an ounce on the Nymex. Prices reached $630.50 during the session, the highest price since August 1987.
The price of palladium has almost doubled so far this year as demand outpaced production for fourth year in a row. Platinum has risen 41 percent. Increasingly stringent legislation on car emissions in the U.S., Japan and Europe are spurring demand for the metals.
Russian shipments declined this year though are becoming more regular after Norilsk obtained a 10-year export quota for palladium, which allowed the company to avoid delays. Russia accounts for two-thirds of global palladium supply and for one- fifth of platinum. Apart from the car industry, the metals are used in dentistry and electronics.
Russia's two other sources of palladium -- the central bank and the State Precious Metals Reserve -- still depend on annual quotas for exports. For platinum, all Russian exporters need annual quotas, and they have yet to obtain such allocations for next year.
Commodities settled as follows:
Precious Metals: February gold up $1.90 to $273.80 an ounce March silver up 7.2 cents to $4.795 an ounce January platinum up $10.10 to $622.10 an ounce March palladium up $40.40 to $880 an ounce
Livestock: February live cattle up 1 cent to 75.275 cents a pound January feeder cattle up 0.775 cent to 89.95 cents a pound February lean hogs up 1.275 cents to 58.3 cents a pound February pork bellies up 2.85 cents to 63.95 cents a pound
Grains: January soybeans down 3.5 cents to $5.045 a bushel March corn down 1.25 cents to $2.2025 a bushel March wheat up 1.75 cents to $2.795 a bushel March oats down 0.25 cent to $1.1025 a bushel
Food and Fiber: March coffee up 0.15 cent to 71.8 cents a pound March cocoa up $10 to $738 a metric ton March cotton up 0.28 cent to 67.85 cents a pound March sugar up 0.2 cent to 9.86 cents a pound January orange juice up 7.1 cents to 86.3 cents a pound
Energy: January crude oil down 80 cents to $31.22 a barrel January natural gas up 76 cents to $7.433 per million British thermal units January heating oil up 3.76 cents to $1.0084 a gallon January gasoline down 2.23 cents to 80.2 cents a gallon
Others: January lumber down $7.60 to $227.20 per 1,000 board feet March copper up 0.35 cent to 86.2 cents a pound |
