Natural gas futures - Weekly outlook: July 22 - 26

Natural gas futures edged lower on Friday, as some investors cashed out of the market to lock in gains from the previous session’s 5% rally that took prices to a four-week high.

Updated weather forecasts showing that a heat wave in the U.S. Northeast and Midwest was expected to give way to below-normal temperatures this week also weighed.

On the New York Mercantile Exchange, natural gas futures for delivery in August fell 1.1% on Friday to settle the week at USD3.771 per million British thermal units.

Despite Friday’s downbeat performance, natural gas prices rose 3.45% on the week, the third consecutive weekly advance.

Nymex gas futures surged 5.1% on Thursday to hit a four-week high of USD3.814 per million British thermal units, following the release of bullish U.S. supply data.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. rose by 58 billion cubic feet last week, below market expectations for an increase of 64 billion cubic feet.

Inventories rose by 29 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a build of 70 billion cubic feet.

Total U.S. natural gas storage stood at 2.745 trillion cubic feet as of last week, 1.2% below the five-year average and 13% below last year's level.

Early injection estimates for this week’s storage data range from 45 billion cubic feet to 60 billion cubic feet, compared to a 26 billion cubic feet increase during the same week a year earlier.

The five-year average for the week is a build of 53 billion cubic feet.

Meanwhile, market players continued to focus on near-term weather forecasts to gauge the strength of demand for the fuel.

Updated weather forecasting models released Friday pointed to milder weather temperatures across most parts of the U.S. Northeast and Midwest for the rest of July.

The U.S. National Weather Service pointed to below-normal temperatures covering the heavily populated Northeast and Midwest regions over the next six to 14 days.

Mild summer temperatures reduce the need for gas-fired electricity to cool homes.

Elsewhere in the energy complex, light sweet crude oil futures for September delivery settled at USD108.23 a barrel by close of trade on Friday, adding 2.1% on the week. 

Meanwhile, heating oil for August delivery tacked on 2% over the week to settle at USD3.095 per gallon by close of trade Friday.

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Crude oil futures - Weekly outlook: July 22 - 26

                    New York-traded crude oil futures ended Friday’s session at the highest level since March 2012, amid indications of improving demand from the U.S. and after Federal Reserve Chairman Ben Bernanke said that the central bank will maintain its easy monetary policy for the foreseeable future.

On the New York Mercantile Exchange, light sweet crude Oil futures for delivery in September rose 0.4% Friday to settle the week at USD108.23 a barrel by close of trade.

Earlier in the day, New York-traded oil prices rose to a session high of USD108.92 a barrel, the strongest level since March 3, 2012. 

On the week, Nymex oil futures advanced 2.1%, the fourth consecutive weekly gain. The U.S. benchmark has rallied nearly 14% over the past four weeks.

Appetite for riskier assets improved after Bernanke said in testimony to Congress that there was no set timeline for the central bank to withdraw its stimulus measures. 

Bernanke said the central bank could scale back its asset purchases by the end of the year if the economy continues to improve, but added that there was no “preset course.”

The Fed Chairman added that the economic recovery was continuing at a moderate pace and that monetary policy will remain accommodative for the foreseeable future.

The Fed’s stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar.

Oil prices were also supported after Wednesday’s bullish U.S. inventory report showed that crude oil inventories fell by 6.9 million barrels last week, compared to expectations for a decline of 2 million barrels. 

Crude supplies in the U.S. are down 27.1 million barrels in three weeks ended July 12, the most in weekly statistics dating back to 1982.

In the week ahead, the U.S. is to publish data on the housing sector and manufacturing to further gauge the strength of the U.S. economy.

The U.S. is the world’s biggest oil consuming country, responsible for almost 22% of global oil demand. 

Market players will also be looking ahead to Wednesday’s data on Chinese manufacturing activity, amid ongoing concerns over the country’s economic outlook.

China’s central bank said on Friday it was removing the lower limit on interest rates for banks, to help lenders attract more borrowers and spur economic activity.

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

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for September delivery shed 0.2% on Friday to settle the week at USD108.48 a barrel.

The London-traded Brent contract lost 0.3% over the week, while the spread between the Brent and the crude contracts stood at USD0.25 a barrel by close of trade on Friday.

Earlier in the session, U.S. crude for September delivery reached a USD0.05 premium over Brent for the first time since October 2010. As recently as February of this year, London-traded Brent was at a USD23 premium over U.S. crude.

The gap between the contracts has been on a downward trend in recent months, amid an improving production outlook in the North Sea and indications of declining stockpiles at Cushing, Oklahoma, the delivery point for Nymex oil futures.

Stocks at Cushing have fallen to 46 million barrels from 52 million in January. - investing.com

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Gold / Silver / Copper futures - Weekly outlook: July 22 - 26

                 Gold futures ended Friday’s session just below a one-month high, after comments by Federal Reserve Chairman Ben Bernanke earlier in the week eased concerns over the possibility the central bank will begin to taper its bond-buying program in the near future.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery rose 0.8% on Friday to settle the week at USD1,295.05 a troy ounce. 

Gold futures were likely to find support at USD1,242.35 a troy ounce, the low from July 10 and near-term resistance at USD1,301.75, the high from June 21.

On the week, gold prices advanced 0.85%, the second consecutive weekly gain.

Comex gold prices rose to a one-month high of USD1,299.45 a troy ounce on Wednesday after Bernanke said the pace of the central bank’s bond purchases are not a “preset course”.

In the first day of his semi-annual testimony to Congress, Bernanke reiterated that the Fed will continue to maintain its accommodative monetary policy for the foreseeable future.

He added that the central bank may taper its USD85-billion-a-month asset-purchase program later this year and halt it around mid-2014.

Bernanke said the pace of purchases could be maintained longer if conditions are less favorable.

The precious metal is on track to post a loss of 23% on the year amid concerns the Fed will start to unwind its stimulus program by the year's end.

An exit from the stimulus would deal a heavy blow to gold, which has thrived on demand from investors who buy gold to hedge against the inflationary risks of loose monetary policies. 

In the week ahead, the U.S. is to publish data on the housing sector and manufacturing to further gauge the strength of the U.S. economy.

Any improvement in U.S. economic activity could scale back expectations for further easing, boosting the dollar and weighing on gold.

Elsewhere on the Comex, silver for September delivery eased up 0.4% on Friday to settle the week at USD19.46 a troy ounce. Despite Friday’s modest gains, silver future prices lost 2.15% on the week.

Meanwhile, copper for September delivery rose 0.5% on Friday to close the week at USD3.146 a pound. 

The red metal found support on Friday after China’s central bank said it was removing the lower limit on interest rates for banks, to help banks attract more borrowers.

China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

Despite Friday’s upbeat performance, Comex copper prices shed 0.25% on the week.

Copper traders will be looking ahead to Wednesday’s data on Chinese manufacturing activity, amid ongoing concerns over the country’s economic outlook. - investing.com

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Crude oil futures slip lower on profit-taking

      Crude oil futures slipped lower on Friday, as investors locked in gains after oil prices rallied on Thursday following the release of upbeat U.S. jobless and supply data. 

On the New York Mercantile Exchange, light sweet crude futures for delivery in September traded at USD107.72 a barrel during European morning trade, down 0.09%. 

On Thursday, the U.S. Department of Labor reported that the number of individuals filing for initial jobless benefits last week fell by 24,000 to 334,000, compared to expectations for a drop of 13,000 to 345,000, which sent the dollar rising. 

In addition, the U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories fell by 6.9 million barrels last week, compared to expectations for a decline of 2 million barrels. 

The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand. 

Meanwhile, Federal Reserve Chairman Ben Bernanke reiterated that monetary policy will remain highly accommodative, even as the central bank starts to pare back its bond buying. 

He was speaking in his second day of testimony on monetary policy before the Financial Services Committee in Congress. 

On Wednesday, Bernanke said the central bank expects to start tapering bond purchases by the end of the year, but added that there was no “preset course.”

He added that the bank’s bond purchase program could be tapered at a faster pace, slower pace or even temporarily increased depending on economic and financial developments. 

Elsewhere, on the ICE Futures Exchange, Brent oil futures for September delivery dipped 0.01% to trade at USD108.68 a barrel, with the spread between the Brent and crude contracts standing at USD0.96 a barrel.  - Investing.com

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Oil falls despite positive U.S. jobs data

                  CrudeOil futures traded lower in the early part of Friday’s Asian session despite another positive data point pertaining to the U.S. labor market. 

On the New York Mercantile Exchange, light, sweet crude futures for June delivery fell 0.34% to USD96.06 per barrel in Asian trading Friday after settling down 0.63% at USD96.01 a barrel on Thursday in the U.S. 

Oil traded lower despite some decent U.S. data points. In U.S. economic news, the U.S. Labor Department said initial claims for jobless benefits fell by 18,000 last week to a five-year low of 324,000. Analysts expected a reading of 345,000 claims. 

Separately, the Commerce Department said the U.S. trade deficit narrowed to $38.8 billion in the first quarter. 

The buoyant jobless claims number comes on the heels of last Friday’s stronger-than-expected April jobs report out of the world’s largest economy. With the U.S. labor market apparently improving, traders speculated that the Federal Reserve may begin winding down its quantitative easing program. 

Last week, the Bureau of Labor Statistics reported that U.S. economy added 165,000 nonfarm payrolls in April, up from 138,000 in March, whose figure was revised up from 88,000. April's figures far outpaced analysts' forecasts for a 145,000 figure. 

Elsewhere, Israeli Prime Minister Binyamin Netanyahu said in a meeting with China’s President Xi Jinping that a nuclear Iran could disrupt global oil supply. China is the world’s second-largest oil consumer behind the U.S. 

Meanwhile, Brent futures for June delivery rose 0.18% to USD104.29 per barrel on the ICE Futures Exchange. - investing.com

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Gold falters on dollar strength

           Gold futures fell in the early part of Friday’s Asian session as traders digested some strong data out of the U.S. while embracing the U.S. dollar. 

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery fell 0.90% to USD1,455.35 per troy ounce in Asian trading Friday after down 0.33% at USD1,468.85 a troy ounce in U.S. trading on Thursday. 

Gold futures were likely to test support USD1,440.55 a troy ounce, Tuesday's low, and resistance at USD1,475.55, Wednesday's high. 

In U.S. economic news, the U.S. Labor Department said initial claims for jobless benefits fell by 18,000 last week to a five-year low of 324,000. Analysts expected a reading of 345,000 claims. 

Separately, the Commerce Department said the U.S. trade deficit narrowed to $38.8 billion in the first quarter. 

The buoyant jobless claims number comes on the heels of last Friday’s stronger-than-expected April jobs report out of the world’s largest economy. With the U.S. labor market apparently improving, traders speculated that the Federal Reserve may begin winding down its quantitative easing program. 

Last week, the Bureau of Labor Statistics reported that U.S. economy added 165,000 nonfarm payrolls in April, up from 138,000 in March, whose figure was revised up from 88,000. April's figures far outpaced analysts' forecasts for a 145,000 figure. 

The Fed has pledged to keep interest rates low until the unemployment drops another 1%. 

Analysts are also pointing to increased physical demand out of Hong Kong and China as catalysts that could be supportive of gold in the coming months. 

Elsewhere, Comex silver for July delivery dropped 1.23% to USD23.618 while copper for July delivery fell 0.14% to USD3.328. - investing.com

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Natural Gas erases losses from supply data, weather forecasts support

               Natural gas futures erased losses sustained earlier Thursday after investors looked past bearish supply data and snapped up nicely priced positions on sentiments that warmer weather will hike demand for air conditioning.

On the New York Mercantile Exchange, natural gas futures for delivery in June traded at USD3.981 per million British thermal units, up 0.06%.

The commodity hit a session low of USD3.890 and a high of USD4.018.

Natural gas prices dropped 2% earlier after the U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended May 3 rose by 88 billion cubic feet, above expectations for an increase of 83 billion cubic feet.

Inventories rose by 30 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a rise of 69 billion cubic feet.

Total U.S. natural gas storage stood at 1.865 trillion cubic feet as of last week. Stocks were 737 billion cubic feet less than last year at this time and 99 billion cubic feet below the five-year average of 1.964 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 109 billion cubic feet below the five-year average, following net injections of 52 billion cubic feet. 

Stocks in the Producing Region were 40 billion cubic feet below the five-year average of 805 billion cubic feet after a net injection of 31 billion cubic feet.

Rising temperatures forecast for the coming weeks should hike demand for natural gas in the country's power plants as households and businesses crank up their air conditioning.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in June were down 0.53% and trading at USD96.11 a barrel, while heating oil futures for June delivery were up 0.50% at USD2.9293 per gallon. - investing.com

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Longer term fundamental outlook robust for Gold: ETFS

              The longer term fundamentals outlook for gold remains robust despite the sharp fall in prices in recent weeks. The depressed price levels have provided an attractive entry point for physical buyes and bargain hunters, according to ETF Securities Ltd (ETFS) in their weekly report.

The recent hectic buying activity in mainland China, Hong Kong for gold bars, record US coin sales, Indian buying ahead of wedding season, important festivals have all provided the support for gold prices to recover from losses last week, ETFS said.

Volumes on the Shanghai Gold Exchange also reached an all-time high last week, evidence of China's strong return to the market. Investors are also starting to regain confidence in the gold price, with long positions up 33% week-on-week.

On an average, Indians are paying a $10/oz premium to secure supplies (according to the Bombay Bullion Association). With the Akshaya Tritiya festival shortly coming up and the Indian festival and wedding season officially starting in August, physical buyers in India are likely to continue taking advantage of current gold prices. Volumes on the Shanghai Gold Exchange also reached an all-time high last week, evidence of China's strong return to the market. Investors are also starting to regain confidence in the gold price, with long positions up 33% week-on-week.

Key events to watch this week: Investor attention will be sharply focused on the ECB meeting this week, with the consensus expecting a cut in rates. That would mark a bold shift in the ECB's thinking as it has traditionally been reluctant to move rates below 0.75%. FOMC members' reaction to the weak GDP and employment data will be closely observed and the payrolls data for April will give clarification as to how sustained the weakness in the US jobs market was.

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Silver futures rally 2%, tracking gold higher

                               Silver futures rose sharply on Monday, tracking strong gains in gold prices as disappointing U.S. economic data weighed on the U.S. dollar, boosting dollar-denominated commodities.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.45% to trade at 82.20, the weakest level since April 17.

Silver prices often move inversely to the U.S. dollar, as the metal becomes less expensive for buyers using other currencies.

On the Comex division of the New York Mercantile Exchange, silver futures for July delivery traded at USD24.33 a troy ounce during European morning trade, up 2.3% on the day.

Comex silver prices rose by as much as 2.6% earlier in the session to hit a daily high of USD24.38 a troy ounce. 

Silver prices were likely to find support at USD22.86 a troy ounce, the low from April 24 and near-term resistance at USD24.83, Friday’s high.

Silver’s gains came as the U.S. dollar weakened against most of its major counterparts as downbeat U.S. GDP data on Friday pressured demand for the greenback.

The Commerce Department said U.S. gross domestic product expanded by 2.5% in the three months to March, missing expectations for growth of 3.0%.

The disappointing data added to expectations that the Federal Reserve will continue its monetary easing program, amid lingering concerns over the outlook for the U.S. economic recovery.

Market players will be focusing on Wednesday’s policy statement from the U.S. central bank, for further hints regarding the future of the central bank’s monetary easing program.

Investors will also be awaiting the outcome of the European Central Bank’s policy meeting on Thursday, amid growing expectations for a rate cut, as well as Friday’s closely watched report on U.S. nonfarm payrolls.

Silver, like gold, can benefit from such an environment of easy money because of expectations that ample liquidity would put a damper on the value of paper currencies.

Elsewhere on the Comex, gold for June delivery rose 1.3% to trade at USD1,472.15 a troy ounce, while copper for July delivery added 0.3% to trade at USD3.196 a pound.
Courtesy : Investing.com

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Copper futures rise to session high after Italian bond auction

                        Copper futures rose sharply on Monday, climbing to the highest levels of the session after Italy saw borrowing costs fall to multi-year lows at a government debt auction earlier in the day.

Copper prices received an additional boost from a weaker U.S. dollar, as dollar-priced commodities become less expensive to investors holding other currencies when the greenback falls.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.45% to trade at 82.20, the weakest level since April 17.

On the Comex division of the New York Mercantile Exchange, copper futures for July delivery traded at USD3.222 a pound during European morning trade, up 1.1% on the day.

New York-traded copper prices rose by as much as 1.2% earlier in the session to hit a daily high of USD3.224 a pound.

Italy’s Treasury sold EUR3 billion worth of ten-year debt at an average yield of 3.94%, the lowest since October 2010 and down from 4.66% at a similar auction last month.

Rome also sold EUR3 billion of five-year government bonds at an average yield of 2.84%, also the lowest since October 2010 and down from 3.65% at a similar auction last month.

Market sentiment found support after a new government was sworn in Italy, ending months of political deadlock after inconclusive elections in February.

Meanwhile, the U.S. dollar was broadly lower against the other major currencies, as Friday’s weaker than expected U.S. first quarter growth data reinforced expectations for continued easing by the Federal Reserve.

The Commerce Department said U.S. gross domestic product expanded by 2.5% in the three months to March, missing expectations for growth of 3.0%.

Market players will be focusing on Wednesday’s policy statement from the U.S. central bank, for further hints regarding the future of the central bank’s monetary easing program.

Investors will also be awaiting the outcome of the European Central Bank’s policy meeting on Thursday, amid growing expectations for a rate cut, as well as Friday’s closely watched report on U.S. nonfarm payrolls.

Elsewhere on the Comex, gold for June delivery rallied 1.2% to trade at USD1,470.35 a troy ounce, while silver for July delivery surged 2% to trade at USD24.27 a troy ounce.
Courtesy : Investing.com

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