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].
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].
When it comes to investing, we often look to experts and top traders, not just to learn their secrets, but to be inspired by their success. Quotes from top commodity traders and experts in the commodities market can serve to illuminate, invigorate, and motivate our research and trading. Below, we outline 20 of our favorite quotes about the hard-asset industry that all investors should know [for more commodity investing 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].
The past few days have seen a number of factors combine to push gasoline prices higher. The most notable price drive came from hurricane Sandy, which wreaked havoc on the east coast and caused what some are estimating tens of billions of dollars in damages. With pipelines and stations around the country knocked out by the “superstorm”, gasoline futures have been on a 10% tear in the trailing 5 days, with more than 5% coming today [for more gasoline news and analysis subscribe to our free newsletter].
Markets were closed late last night in preparation for hurricane Sandy, as the storm has its sights set on the east coast. With approximately 50 million people in its projected path, Sandy is predicted to dump unprecedented amounts of rain that could cause an 11 foot rise in some areas of the coast line. “From North Carolina to Maine, forecasters warned that Sandy was likely to collide with a cold front and spawn a “superstorm” that could generate flash floods, snowstorms and massive power outages” write Chelsea J. Carter and Josh Levs.
Without gasoline, many of us could not go on with our daily routines. And because of our high level of dependence, gasoline has become one of the most important commodities in the world. Gasoline, more specifically RBOB Gasoline, is a petroleum-derived liquid mixture and its usage in the transportation industry in the U.S. accounts for over 40% of global gasoline demand. The price of gasoline can be affected by a multitude of factors, including the health of the global economy, geopolitical tensions, and even changing tax policies across the globe [for more gasoline news and analysis subscribe to our free newsletter].
Although the concept of “hedging” has been stretched, abused, and otherwise manipulated over the years, it is nevertheless a very important process for many companies. Commodity producers use forwards and futures contracts to help ensure a certain level of cash flow, and corporate commodity consumers use hedging to help control costs. So here’s a thought – can regular people use commodity investment products like ETFs to hedge some of their everyday costs of living?