Energy Commodities Post Losses Amid Oversupply

Precious Metals Down by Year-End

Gold managed to inch up in a short session on Thursday, as a slightly weaker Greenback supported prices of the precious metal going up on the last day of the year, which saw the bullion decline for the third straight year, as the start of the Fed’s rate hike cycle boosted the US Dollar and weighed on the metal. On the Comex division of the New York Mercantile Exchange, bullion futures for delivery in February settled at $1,060.4 a troy ounce by the end of Thursday’s trade. Despite slight gains, gold futures still slid on the week, closing the year 9.2% lower compared to the previous year’s end price, driven down by the belief that the beginning of a rate hike cycle, which has been the key factor in gold’s losses in 2015, as well as loose monetary policies from the other Central Banks will continue to support traders’ demand for the Greenback, which will in turn be bearish for the precious metal.

Silver futures for March delivery were trading almost unchanged on Thursday, settling at $13.855 a troy ounce on the Comex division of the New York Mercantile Exchange by the end of trade, swinging between $13.765 to $13.960 during the day. On the week, silver prices slumped 3.74%, while the registered year-on-year precious metal futures decline was at 11.27% in 2015.

Platinum slid at the end of the previous week, with metal’s futures for April delivery plummeting $4.80, or 0.6% on Thursday to settle at $866.30 per ounce. Taking Thursday’s losses into account, prices finished 0.02% lower compared to the previous week’s closing price on the Nymex. Meanwhile, prices of platinum have dropped by around 30% from year ago, and sell-off in the precious metal is believed to continue.

Palladium exchanged hands for $551.35 an ounce by the close of trade on Thursday, which is up $2.40 compared to the previous session’s end price. However, on the week, prices of the metal settled 2.69% lower.

Base Metals Finish Mixed On Stocks’ News

Aluminum was trading little changed on Thursday, though still jumping a bit compared to the previous session’s end price, settling at $1,528 a tonne, as the news that revealed that inventories as well as cancelled warrants declined 5,675 tonnes to 2,895,525 tonnes and 1,097,750 tonnes respectively, which supported prices going up at the London Metal Exchange. Despite these gains, aluminum still did not manage to close the prior trading week higher, posting a weekly decrease of 3.82% and 19.7% drop from a year ago. In the meantime, weak growth in emerging markets continue to dampen prices of the metal; thus, further production cuts would be needed to restore the balance on the market in 2016.

Copper futures for delivery in March rose on Wednesday, adding $1 to finish the trading session at $4,736 a tonne on the Comex division of the New York Mercantile Exchange, as stocks declined 750 tonnes to 236,225 tonnes, while cancelled warrants, on the contrary, jumped 2,050 tonnes to 40,300. Over the previous week, copper prices did not manage to add, sliding 1.7%. Meanwhile, copper finished the year with an annual decline of 27.28% in 2015, as fears that slower economic recovery in China would decrease the country’s demand for the red metal rattled investors’ sentiment.

Nickel also closed Thursday’s trade remarkably higher at the London Metal Exchange, even despite stocks fell 3,406 tonnes to 441,294 tonnes and cancellations added 4,662 tonnes. In spite of these gains, over the previous trading week, nickel futures still plummeted 1.59%, as weak demand from China continued to leave the outlook for the metal uncertain.

Zinc rallied $2, settling at $1,635 a tonne at the LME on Thursday to hit its one-month high, even despite stocks climbed 1,575 tonnes to 464,400 tonnes, while cancelled warrants jumped 3,450 tonnes to 61,075 tonnes. As concerns the whole week, prices of zinc added 0.97% at the London Metal Exchange.

Energy Commodities Post Losses Amid Oversupply

Crude oil prices rallied in a short session ahead of the New Year holiday on Thursday, though still finished the week remarkably lower, being weighed down by continued oversupply concerns. On the New York Mercantile Exchange, crude oil futures for delivery in February finished at $37.08 a barrel by the end of Thursday’s trade, bringing monthly decline to 8.03% and yearly losses to 30.99%, which is the second consecutive annual decrease for the first time in more than fifteen years, as worries about ample domestic supply along with global crude oil supply glut concerns weighed on the traders’ sentiment. Meanwhile, the US EIA report showed that stocks of crude oil in the United States are currently standing at nearly eight-decade highs, increasing by 2.6 million barrels to 487.4 million barrels in the week ended December 25, missing the expectations of 1 million barrels decline for the week.

Brent oil futures for delivery in February also rose by the end of Thursday’s trade to settle at $37.61 a barrel on the ICE Futures Exchange, which is down almost 14% on a monthly basis and over 35% for the year, the third consecutive yearly drop in London-traded Brent oil futures, as oversupply remained in focus for most of the year.

Natural gas futures rocketed more than 30% over the last two weeks; however, on the year natural gas futures posted a decline of nearly 19.21%, marking their second straight year of losses in 2015 on the back of growing oversupply concerns for the fuel. Besides, according to the data released on Thursday, stockpiles of natural gas dropped more than anticipated over the prior trading week, helping to support the market. Meanwhile, futures for February delivery settled 5.6% higher to close the short trading session ay $2.337 per million British thermal units by the end of Thursday on the New York Mercantile Exchange.

Grains Plummet on Weak Foreign Demand

Corn fell at the end of the previous week; however, losses were still limited due to weakness in the value of the US Dollar and slightly higher Crude oil prices along with the news that the grain has reached the competitive price level on the global market. At the Chicago Board of Trade, the most actively-traded corn futures for delivery in March posted a decrease of 0.25 cents, or 0.07%, to settle at $3.58 a bushel by the close of trade on Thursday, the lowest closing price since December 2, while on the week prices slipped 3.57%, finishing the year with a decline of 11.46% amid weak overseas demand overall.

Wheat prices were swinging between slight gains and losses for much of the session on Thursday, still closing mixed on indications that demand could even become better in the following weeks. At the Chicago Board of Trade, wheat futures for delivery in March, the best-traded contract, added 0.25 cents, or 0.05%, to finish Thursday’s session at $4.70 a bushel. As concerns the whole trading week, US grain prices shed 1.98%, posting a yearly decline of 22.3%.

Soybean prices closed out the very last trading day of the previous year on a slight down note, dipping even further on overall negative sentiment from traders’ side. At the Chicago Board of Trade, soybean futures for delivery in January sank 1.95% on the week, as the USDA data revealed export sales in the week ended December 24 were well below estimates, while heavy rains and flooding continued to increase the supplies available to the domestic market. Besides, large crops in South America and particularly in Brazil have boosted competition against soybeans grown in the US, dampening global demand.

Raw sugar has not been a standout performer of the last week on the grain market. Over the course of the prior trading week, the most actively-traded raw sugar futures dipped 0.6% at the Chicago Board of Trade.

EXPLANATIONS

Commodities

• Gold - COMEX active contracted (USD/t o.z.)

• Silver - COMEX active contract (USD/t o.z.)

• Platinum - New York Mercantile Exchange active contract (USD/t o.z.)

• Palladium - New York Mercantile Exchange active contract (USD/t o.z.)

• Aluminum - Active contract of primary aluminum of minimum 99.2% purity at the LME (USD/MT)

• Copper - Active contact of electrolytic copper at the LME (USD/MT)

• Zinc - Active contract of zinc od minimum 99.995% purity at the LME (USD/MT)

• Nickel - Active contract of nickel of 99.8% purity at the LME (USD/MT)

• Crude oil - light, sweet crude oil active contract on the New York Mercantile Exchange (USD/bbl.)

• Brent oil - Brent oil active contract on the ICE Futures Europe (USD/bbl.)

• Natural Gas - natural gas active contract on the New York Mercantile Exchange (USD/MMBtu)

• Heating oil - heating oil active contract on the New York Mercantile Exchange (USD/gal.)

• Wheat - wheat active contract on the Chicago Board of Trade (cents/bu)

• Corn - corn active contract on the Chicago Board of Trade (cents/bu)

• Coffee - benchmark Arabica coffee active contract on the NYB-ICE Futures Exchange

• Soybeans - active contract on the Chicago Board of Trade (cents/bu)

Indices

• S&P GSCI Precious Metals Total Return Index - commodity group subindex composed of gold and silver; the index reflects return on underlying commodity futures price movement

• S&P GSCI Industrial Metals Total Return Index - commodity group subindex composed of futures contracts on aluminium, copper, lead, nickel and zinc

• S&P GSCI Energy Total Return Index - commodity group subindex composed of futures contracts on crude oil, Brent oil, RBOB gas, heating oil, gas oil and natural gas

• S&P GSCI Agriculture Total Return Index - commodity group subindex composed of futures contracts on wheat, red wheat, corn, soybeans, cotton, sugar, coffee and cocoa

Indicators

Long-term price forecasts - aggregated price forecasts based on predictions of 20 international banks forecasts

USDA Wasde Total Estimated Inventories (Today) - current level of inventories of wheat in 1000 MT, corn in 1000 MT, soybeans in million bushels and green coffee in 1000 bags

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