As 2013 draws to an end, we take a moment to reflect on the happenings in the commodity world from this past year. All-in-all, it was a tough year for a number of hard assets, as the S&P GSCI Commodity Index struggled to find any momentum, losing approximately 2% for the year. Meanwhile, the S&P 500 has jumped more than 26%, as equities have dominated throughout the year. While the story has been grim for some, there are a handful of commodities that have been able to turn in a solid performance in 2013 [for more commodity news and analysis subscribe to our free newsletter].
As earnings season gets into full swing, Wall Street’s attention will be fixated on the results of the most recent quarter. This week sees big oil step up to the plate, with some of the biggest names in the industry reporting on how they fared over the past three months. Below, we preview some of the most significant commodity earnings from the week ahead, helping investors prepare for what will ultimately be an active five day stretch for markets:
In recent years, investors have witnessed the U.S. become a dominant force in the crude oil space, thanks in part to a development in technologies like fracking as well as more pipelines distributing the energy resource around the nation. Currently, the U.S. produces roughly 11.1 million barrels per day, and in 2012 the country exported more than 1.17 billion barrels around the globe. As global demand for the U.S.’s sweet crude oil increases, other producers have started to feel the pressure of the competition and increasing stockpiles of crude. As such, regions like Europe have started to look elsewhere to sell their mounting surplus of oil and gasoline [for more energy news and analysis subscribe to our free newsletter].
By now, you have probably noticed that prices at the pump have been anything but kind. Gasoline prices have been steadily rising in the U.S. as the summer months continue to heat up. While it is true that gasoline prices are typically higher during the warmer months as demand also rises, the current spike is also due to some behind the scenes issues that many consumers may not be aware of [for more gasoline news and analysis subscribe to our free newsletter].
So far in 2013, high-yielding securities have taken somewhat of a beating as general uncertainty and looming concerns over Fed tapering have put downward pressure on this corner of the market. Despite this trend, there are still several companies that are dishing out juicy dividends, with some yielding more than 20% [for more commodity news and analysis subscribe to our free newsletter].
While the global economic slowdown has impacted nearly every corner of the investable universe, one commodity group that has been hit particularly hard has been energy. Oil, gas, coal, and even nuclear power have all fallen victim to sluggish economic growth and dwindling global demand. And in its annual energy report, BP takes a closer look at how exactly the global recession has impacted the supply and demand of some of the most widely-traded commodities on the market [for more energy news and analysis subscribe to our free newsletter].
Backwardation is the process where near-month futures are more expensive than those expiring later in time, which creates a downward sloping curve for prices over time. It is a natural occurrence in the commodity world, but it’s still a phenomenon that traders need to be aware of. Often, a falling futures curve could mean that the market expects the commodity to take a drop in value or that it is currently overpriced [for more commodity futures news and analysis subscribe to our free newsletter].
The energy sector has been anything but stable this year, as commodities as a whole suffered at the hands of volatile trading. Crude oil prices surged all across the board while popular natural gas struggled to maintain a direction. With 2012 coming to a close, we take a look back on the year and outline the best and worst performing energy ETFs. Note that this list excludes leveraged and inverse products [for more energy ETF news and analysis subscribe to our free newsletter].