March Backwardation Report: Energy Futures Downward Sloping

Backwardation is the process by which futures contracts decrease in price as they move further out in maturity. This can often be due to the expectation of future prices or trends in a certain hard asset, but it can also occur from supply boosts, among other things. Though it is not a phenomenon that should worry investors, keeping an eye on the futures curve can help you make more informed investment decisions [for more commodity news and analysis subscribe to our free newsletter].

Posted in Agriculture, Brent Oil, Cotton, Energy, Gasoline, WTI | Tagged , , , | 1 Comment

Backwardation Report: A Mixed Bag

Last week, we gave investors our first contango report for 2014, noting that precious metals are facing upward curves for the foreseeable future. This week, we’re bringing you the first backwardation report of the year. For those unfamiliar with this term, backwardation is the process whereby near month futures are more expensive than those expiring further into the future, creating a downward sloping curve for future prices over time – put simply, it’s the opposite of contango [for more commodity news and analysis subscribe to our free newsletter].

Posted in Agriculture, Brent Oil, Commodity Futures, Copper, Energy, Industrial Metals, Soybeans, WTI | Tagged , , , | Leave a comment

Why the WTI Vs. Brent Crude Spread Is Shrinking

The spread between West Texas Intermediate (WTI) and Brent Crude oil has long been under the microscope for energy traders across the world. The past few years have seen this spread heavily favor Brent, as it has been trading at a premium to its western cousin for quite some time. But as 2013 unfolds, the spread has been steadily narrowing, much to the surprise of a number of analysts [for more crude oil news and analysis subscribe to our free newsletter].

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How Crude Oil Traders Manipulate The Market

Market manipulation, especially in the commodity space, is nothing new. Hard assets like gold and silver are almost always under scrutiny for fear that large institutions are getting away with fixing the market; JP Morgan just recently escaped such charges concerning silver markets. The latest scandal has hit the European Union, as one trader has stepped forward, detailing how he (and many others) have been able to successfully manipulate Platts oil prices over the years [for more crude oil news and analysis subscribe to our free newsletter].

Posted in Brent Oil, Energy, News and Current Events, WTI | Tagged , | 6 Comments

Backwardation Report: Cotton, Crude and Gasoline Face Falling Prices

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].

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Backwardation Report: Energy And Grains Face Falling Curves

Backwardation and contango are two phenomena that define the futures industry of the commodity world. Though the terms have come handcuffed with a negative connotation, those who understand how they work should not sweat their existence. Backwardation is the process by which near month futures are more expensive than those expiring further into the future, creating a downward sloping curve for future prices over time. Contango, simply, has the opposite impact [for more commodity news and analysis subscribe to our free newsletter].

Posted in Agriculture, Brent Oil, Commodity Futures, Energy, Soybeans, WTI | Tagged , , | 1 Comment

The Best And Worst Energy ETFs Of 2012

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].

Posted in Actionable Ideas, Biofuels, Brent Oil, Commodity ETF Analysis, Commodity ETFs, Commodity Futures, Energy, Gasoline, Natural Gas, WTI | Tagged , , | Leave a comment

Commodity HQ Profile: John Fredriksen

John Fredriksen is a self-made billionaire who built his financial empire as a shipping magnate, primarily in the business of transporting oil, then continued his success in offshore oil drilling. Fredriksen is currently ranked number 75 on Forbes’ list of billionaires, and listed at 68 on Bloomberg’s list of the 200 richest people. His net worth is currently estimated at $13.3 billion as per Bloomberg’s figures. Britain’s Sunday Times lists him as the ninth richest person residing in the country, where they estimate his wealth at £6.6 billion [for more commodity news and analysis subscribe to our free newsletter].

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Citi’s Energy Outlook For 2013

Considering this year’s rather volatile performance, one thing can be agreed upon by almost all investors – commodity investing is essentially a crap shoot. This year’s unprecedented summer drought and escalated geopolitical tensions in the Middle East have wreaked havoc on commodity markets, leaving some lucky investors with profitable returns and others with steep losses. Overall, however, commodities have been experiencing a steady uptrend for quite some time, as global demand has continuously inched higher despite the recent economic slowdown. In a recent statement, global head of commodities research at Citigroup Edward Morse warned that the “commodity super-cycle” is over and that “no longer will a pure long-only strategy bring the returns expected in 2002 to 2008, nor will conditions approximating those of the last decade return anytime soon” [for more commodity news and analysis subscribe to our free newsletter].

Posted in Academic Research, Brent Oil, Commodity Trading Outlook, Energy, Natural Gas, WTI | Tagged , , | 4 Comments

The World’s 5 Largest Oil Consumers

Crude oil is an addiction that our global economy will not be able to break anytime soon. The fossil fuel is involved in many facets of our everyday lives whether we realize is it or not, and demand for this commodity is only growing. As emerging economies around the world continue to grow and population figures increase, consumption of oil is only going to jump. Below, we take a look at the 5 biggest oil consuming nations in the world to keep an eye on in the coming years [for more crude oil news and analysis subscribe to our free newsletter].

Posted in Actionable Ideas, Asset Allocation, Brent Oil, Energy, WTI | Tagged , , , , , , | 4 Comments