Global| Mar 06 2006Commodity Prices Strong - Except Natural Gas
by:Tom Moeller
|in:Economy in Brief
Summary
Crude oil prices have been quite strong of late. On Friday, spot WTI crude stood at $63.68 per barrel. Still down slightly from the early year highs near $68, prices have recovered from below $58.00 just two weeks ago. That strength [...]
Crude oil prices have been quite strong of late. On Friday, spot WTI crude stood at $63.68 per barrel. Still down slightly from the early year highs near $68, prices have recovered from below $58.00 just two weeks ago.
That strength fueled inflationary concerns generally and lifted Friday's gold price to $565.00 per ounce, up $26 from two weeks earlier. Since 1980 there has been a 66% correlation between the level of gold prices and the y/y change in consumer prices.
Also during the last two weeks, industrial metal prices were strong due to indications of a resilient factory sector. The JoC-ECRI Industrial Metals Prices Index rose 4.1% (14.8% y/y) since mid-February due to a 7.8% (21.3% y/y) rise in aluminum ingot prices and a 2.7% (52.1% y/y) gain in high grade copper. In addition, prices of stainless steel scrap are up 18.8% (-4.3% y/y) since year end '05.
The laggard on the pricing scene has been natural gas. As of Friday, The Henry Hub price for gas fell to $6.59/mmbtu (-1.6% y/y), nearly half the high of $12.72 averaged during December. January's record warm temperatures did drop to a more seasonable cold during February, but warm temperatures during the last week hint that the end of the heating season is near.
Retail gasoline prices at $2.25 (16.6% y/y) per gallon also are off the earlier lows but very recently have fallen 10 cents from late January.
The Economic Outlook for the United States, a speech by Federal Reserve Vice Chairman Roger W. Ferguson, Jr. on Friday, is available here.
| Weekly Prices | 02/28/06 | 12/27/05 | Y/Y | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|
| Light Sweet Crude Oil, WTI (per bbl.) | $61.42 | $58.16 | 18.8% | $58.16 | $41.78 | $32.78 |
| Gold: Handy & Harmon (per Troy Oz.) | $556.00 | $568.75 | 28.3% | $507.40 | $443.40 | $416.25 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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