In the commodities world, oil is undeniably one of the most important resources on the globe. Its price movements are closely tied to nearly every economic factor, as well as both domestic and international conflicts. In recent weeks, the escalating violence in Syria has put significant upward pressure on oil, pushing the fuel over $110 a barrel. While the country itself is not a major oil producer, its close geographic proximity to key sea routes and pipelines has investors understandably concerned over the immediate future of the commodity [for more oil news and analysis subscribe to our free newsletter].
As fracking continues to develop, with new reserves being discovered on a daily basis, the world has watched natural gas production surge. Though still a non-renewable resource, natural gas burns cleaner and is cheaper than crude oil. As the world looks to replace dated energy sources, natural gas figures to be an increasingly significant commodity. At the forefront of the NG movement has been the U.S., as its presence in the natural gas world has continued to skyrocket in recent years [for more natural gas news and analysis subscribe to our free newsletter].
Bullish euphoria seems to have evaporated over the past week as profit-taking pressures have once again swept over Wall Street in light of the potential Fed taper coming up in September’s FOMC meeting. With Treasury yield on the rise again, many are locking in profits on the equity front; however, a surprise decision from the Fed to hold off from tapering entirely this time around has the potential to ignite a furious rally that will catch most off guard [for more commodity futures news and analysis subscribe to our free newsletter].
When it comes to commodity production, Mexican oil is perhaps not what first comes to mind. Currently, the country produces roughly 2.55 million barrels of crude a day; compared to the U.S.’s production of over 7 million barrels per day, Mexico’s capabilities seem rather limited. Recent legislation, however, has created the potential for more oil companies to gain access to some of the world’s largest remaining untapped oil reserves [for more oil news and analysis subscribe to our free newsletter].
Stocks have recovered from the “taper” scare and the bulls are back in the driver’s seat, although sluggish growth in Japan coupled with worse-than-expected retail sales at home may bring out the bears before this trading week is over. Major equity indexes continue to grind sideways as investors remain hesitant to push strongly in either direction; looming seat changes on the board of the Federal Reserve coupled with Congress re-opening the budget debate in September have given some investors plenty of reasons to avoid jumping in long amid the ongoing euphoria [for more commodity futures news and analysis subscribe to our free newsletter].