This Week In Commodities: February 3rd Edition

Many were worried that this week was a sign of a sputtering rally that commodities and equities had both been enjoying during January. But February eventually brought good news today, as unemployment dipped to a healthy 8.3%, leading to bullishness for the majority of wall street. This week marked the end of the best January stocks have seen since 1997, but that does not mean that it was without losses. Natural gas futures, for example, tanked by nearly 10.5%, giving up the gains that had been amassed the week earlier. Top performers came from two relatively unpopular futures contracts as lumber and oats gained 7.6% and 3.4% respectively. In an effort to keep our readers up to date on all of the happenings around the commodity world, we outline three of the best stories from around the web this week [see also The Ten Commandments of Commodity Investing].

Crude Oil Report: US Oil Demand Plunges To Lowest Since 1999, S. Sudan Shuts Off Oil Production at Hard Assets Investor:

Crude oil, arguably the world’s most important commodity, has been in the limelight lately as it seems to be stuck in something of a horizontal trend. Though it has been home to some volatile daily swings, its price has been stuck in the $98 to $100/barrel range for some time now. But there may be a more clear cut direction as to where crude is headed based on evidence that U.S. demand has dropped to its lowest levels since 1999. While this may be a good long term trend for the country, it certainly has the potential to destroy crude. This article, by Sumit Roy, details the reasons why prices have remained high despite a drop in demand and gives investors a great outlook on this asset.

Natural Gas, Contango and UNG at VIX and More:

Natural gas has been one of the worst performing commodities on the year, as warm temperatures across the nation have stymied demand while stockpiles have risen to highs not seen for quite some time. Though it had a nice rally to end last week, this week watched it fall right back into the gutter, slaughtering a number of positions for many investors. This article, by Bill Luby, describes the contangoed environment of natural gas, what it means for the United States Natural Gas Fund (UNG), and an outlook for the rest of the year on this struggling commodity.

Hot Commodities: Orange Juice Futures Lead Commodities For 2012 at CommodityHQ:

While many investors are focused on gold futures and a number of other popular commodities that are typically in the limelight. All the while, orange juice futures have been soaring largely under the radar of most investors. Though its rally has cooled off a bit this week, orange juice futures had been up nearly 26% in January as a number of factors combined to push prices through the roof. This article outlines orange juice’s rise as well as the factors that will play into its near term future.

Disclosure: No positions at time of writing.

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