Natural gas futures - weekly outlook: January 27 - 31

                U.S. natural gas futures soared nearly 10% to hit a four-year high on Friday, as frigid temperatures and snowstorms struck from the Midwest to the East Coast for the second time this month, tightening supplies.

On the New York Mercantile Exchange, natural gas futures for delivery in February rallied 9.56% on Friday to settle the week at USD5.182 per million British thermal units. 

Earlier in the day, Nymex gas prices hit a session high of USD5.246 per million British thermal units, the strongest level since June 2010.

The February contract settled Thursday’s session up 0.87% to end at USD4.730 per million British thermal units.

Natural gas futures were likely to find support at USD4.813 per million British thermal units, the low from January 24 and resistance at USD5.246, the high from January 24. 

On the week, Nymex natural gas prices surged 16.5%, the second consecutive weekly gain and the largest increase in nearly three years, after updated weather forecasting models called for fresh blasts of cold air to sweep across the U.S. through the end of January.

The U.S. National Weather Service said that it expected extreme cold conditions to continue in the heavily populated Midwest and Northeast over the next 14-days. 

Bullish speculators spent the session betting that colder weather will increase demand for the heating fuel.

The heating season from November through March is the peak demand period for U.S. gas consumption. Approximately 52% of U.S. households use natural gas for heating, according to the Energy Department.

The U.S. Energy Information Administration said Thursday that natural gas supplies dropped by 107 billion cubic feet in the week ended January 17. 

Total U.S. natural gas storage stood at 2.423 trillion cubic feet as of last week, approximately 13% below the five-year average for this time of year.

Natural-gas inventories have fallen by 1.411 trillion cubic feet since November 8 as frigid winter temperatures in the U.S. led households to burn a higher than normal amount of the fuel in furnaces to heat their homes.

Some expect supplies at the end of the winter heating season in March to be at their lowest in six years.

Wall Street investment bank Goldman Sachs lowered its forecast for inventory levels at the end of March to 1.39 trillion cubic feet earlier in the week, driven by the recent “polar vortex.” Goldman had previously estimated U.S. gas inventories at 1.61 trillion by the end of March.

Early withdrawal estimates for this week’s storage data range from 170 billion cubic feet to 239 billion cubic feet, compared to a drop of 191 billion cubic feet during the same week a year earlier.

The five-year average change for the week is a decline of 162 billion cubic feet.

Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers increased their bullish bets in natural gas futures in the week ending January 21.

Net longs totaled 154,643 contracts, up 17.2% from net longs of 128,072 in the previous week.

Elsewhere in the energy complex, light sweet crude oil futures for March delivery settled at USD96.64 a barrel by close of trade on Friday, up 2.12% on the week. 

Meanwhile, heating oil for February delivery climbed 3.47% on the week to settle at USD3.137 per gallon by close of trade Friday. - investing.com

Read More

Crude oil futures - weekly outlook: January 27 - 31

             New York-traded crude oil futures fell from a three-week high on Friday, as growing concerns over the economic outlook in emerging markets and the impact on future oil demand prospects dampened the appeal of the commodity.

On the New York Mercantile Exchange, light sweet crude futures for delivery in March shed 0.7% on Friday to settle the week at USD96.64 a barrel by close of trade. 

On Thursday, Nymex oil prices hit USD97.84 a barrel, the strongest level since January 3, before trimming gains to end at USD97.32 a barrel, up 0.61%.

U.S. oil futures were likely to find support at USD95.12 a barrel, the low from January 22 and resistance at USD97.84 a barrel, the high from January 23. 

On the week, U.S. crude futures, also known as West Texas Intermediate or WTI, climbed 2.12%, the second consecutive weekly gain.

Weaker U.S. equities and ongoing turbulence in emerging markets prompted investors to move money out of industrial commodities and into safe haven assets. 

U.S. stocks suffered their worst weekly loss since 2011, with the Dow plunging 318 points on Friday. 

Meanwhile, a selloff in emerging markets accelerated, after the Turkish lira fell to the latest in a series of record lows against the dollar. South Africa’s rand, the Russian ruble and the Argentine peso all fell to multi-year lows against the greenback Friday.

Market sentiment was hit by concerns over a slowdown in China after data on Thursday showed that the preliminary reading of the HSBC manufacturing index fell to a six-month low in January.

The Asian nation is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.

Despite Friday’s losses, Nymex oil prices posted a weekly gain as the Keystone XL pipeline linking Cushing, Oklahoma, to the U.S. Gulf Coast began making deliveries this week. Flows will rise over the course of the year toward its 700,000-barrel capacity, which should ease bottlenecks that have depressed prices at times.

Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers increased their bullish bets in oil futures in the week ending January 21.

Gross long oil positions rose by 10,614 contracts to 294,921, while gross short positions increased by 9,833 lots to 64,418. Net longs totaled 230,503 contracts, compared to 229,722 in the preceding week.

In the week ahead, Wednesday’s outcome of the Federal Reserve’s monthly meeting will be in focus amid expectations for a reduction to USD65 billion from the current USD75 billion in the bank’s stimulus program.

The policy-meeting will mark the last for outgoing Fed Chairman Ben Bernanke, as current Vice Chair Janet Yellen prepares to take over.

In addition, the initial estimate of U.S. fourth quarter gross domestic product is reported on Thursday.

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for March delivery advanced 0.28% on Friday to settle the week at USD107.88 a barrel. 

The March Brent contract added 1.29% on the week. Meanwhile, the spread between the Brent and the crude contracts stood at USD11.24 a barrel by close of trade on Friday. - investing.com

Read More

Gold / Silver / Copper futures - weekly outlook: January 27 - 31

         Gold futures ended Friday’s session at a nine-week high, as steep losses in U.S. equities and emerging market currencies boosted the safe haven appeal of the precious metal.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery hit a session high of USD1,273.20 a troy ounce on Friday, the strongest level since November 20, before trimming gains to settle at USD1,264.30, up 0.16%. 

Comex gold prices rallied 1.91% on Thursday to settle at USD1,262.30 a troy ounce as investors fleeing risk in emerging markets saw gold as an attractive venue.

Gold futures were likely to find support at USD1,230.80 a troy ounce, the low from January 23 and near term resistance at USD1,275.70, the high from November 20. 

On the week, the February Comex gold contract added 1.67%, the fifth consecutive weekly increase and the longest run of weekly gains in 16 months.

A broad based selloff in financial markets Friday spurred safe haven demand, prompting investors to move money out of equities and into gold. U.S. stocks suffered their worst week since 2011, with the Dow plunging 318 points on Friday.

Market sentiment was hit by concerns over a slowdown in China after data on Thursday showed that the preliminary reading of the HSBC manufacturing index fell to a six-month low in January.

Meanwhile, a selloff in emerging markets accelerated on Friday, after the Turkish lira fell to the latest in a series of record lows against the dollar. South Africa’s rand, the Russian ruble and the Argentine peso all fell to multi-year lows against the greenback.

Emerging market currencies have been hard hit since the Federal Reserve announced plans last month to begin scaling back its asset purchase program.

Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers raised their bullish bets in gold futures in the week ending January 21.

Gross long gold positions declined by 179 contracts to 113,823, while gross short positions fell by 255 lots to 70,470. Net longs totaled 43,353 contracts, compared to 43,277 in the preceding week.

In the week ahead, Wednesday’s outcome of the Federal Reserve’s monthly meeting will be in focus amid expectations for a reduction to USD65 billion from the current USD75 billion in the bank’s stimulus program.

The policy-meeting will mark the last for outgoing Fed Chairman Ben Bernanke, as current Vice Chair Janet Yellen prepares to take over.

In addition, the initial estimate of U.S. fourth quarter gross domestic product is reported on Thursday.

Elsewhere on the Comex, silver for March delivery ended Friday’s session down 1.22% to close the week at USD19.76 a troy ounce. The March silver futures contract lost 2.66% on the week. 

Meanwhile, copper for March delivery slumped to a daily low of USD3.260 a pound on Friday, the weakest since December 11, before trimming losses to end at USD3.271 a pound, down 0.43%.

Prices of the industrial metal dropped 1.54% on Thursday to settle at USD3.285 a pound as downbeat manufacturing data out of China fuelled concerns over the strength of the world’s second largest economy and biggest consumer of the industrial metal.

Comex copper prices declined 2.18% on the week. - investing.com

Read More