Polar vortexes and heavy snow are two of the most defining characteristics of the 2013-2014 winter season in the U.S. Bitter cold and harsh weather conditions have taken their toll on parts of the economy, especially when it comes to employment figures. However, when it comes to natural gas prices, the cold weather has propelled the fossil fuel higher, as incessant demand has sent NG on a tear to open up the year [for more natural gas news and analysis subscribe to our free newsletter].
Last week saw a major breakthrough for the Keystone XL Pipeline, as an analysis determined that the project would not have a significant impact on Canadian oil sands. By virtue, many are taking that statement as indirectly suggesting that the project would not have a major environmental impact as well. The potential environmental backlash has long stood in the way of this project’s completion, as many feel that the State Department has still failed to take into account the potential impact [for more commodity news and analysis subscribe to our free newsletter].
As we enter the latter part of earnings season, investors have already gotten a taste of how the final three months of 2013 fared for the Street. Thus far, it seems that there have been more earnings misses or disappointing guidance given than major wins or rosy outlooks. This week will keep energy firms in the spotlight with a few key European-based firms reporting, as well as one major agribusiness entity [for more commodity news and analysis subscribe to our free newsletter]:
2013 was undoubtedly a rough year for commodities, particularly for precious metals like gold and silver. There were, however, some bright spots in the space, including cocoa, soybean meal, orange juice, gasoline, and brent. For the coming year, analysts remain rather pessimistic on the broad commodity market. Goldman Sachs analysts have noted: “Last year, we pointed to the ongoing shift in our commodity views, ultimately towards downside price risk. The impact of supply responses to the period of extraordinary price pressure continues to flow through the system.” [For more commodity news and analysis subscribe to our free newsletter].
For energy traders, the winter months are some of the most active of the year as demand for commodities like natural gas often skyrockets. With weatherman forecasting this December to be the coldest since 1983, investors could be in for some lucrative plays in the natural gas market. Cold weather has already begun to sweep across the nation, with the Midwest and Northeast–two regions that rely heavily on gas for heating–already experiencing plummeting temperatures since before Thanksgiving [for more commodity news and analysis subscribe to our free newsletter].