Primary Commodities Report for November 18th – 29th
By: Gabriel Kukulka, The Quinnipiac University Economics Research Team
Commodities Index
Source: Yahoo Finance and own calculations. Rates are in United States dollars per one (1) unit of goods. Brent Crude Oil and Natural Gas are measured in barrels, Gold is per ounce, and the ETF is per share. They are all indexed to be at 100 at the start of the period.
Between November 18th and November 29th, Natural Gas stood out among the tracked commodities as it experienced a significant price surge, while the other tracked commodities showed relatively modest changes. Natural Gas (green) experienced three sharp spikes over the two weeks, culminating in a 13.1% increase. On November 26th, during the second spike, it was up more than 15%. In contrast, Gold (yellow) showed steady growth, rising by 1.7%. Brent Oil (black) saw a slight decline, ending the period down 0.5%. Nickel (red) also decreased, steadily falling after November 22nd to finish 1.0% lower.
Commodities Historical Trends
Source: Yahoo Finance and own calculations. Rates are in United States dollars per one (1) unit of goods. Brent Crude Oil and Natural Gas are measured in barrels, Gold is per ounce, and the ETF is per share. The center line is a rolling three-month average. The upper and lower boundaries are the average plus and average minus one standard deviation, respectively, for the same three-month period.
As December fast approaches, Natural Gas and Nickel appear to be the most volatile commodities. Natural Gas surged this week to $3.36 per barrel, marking a new three-month high. In contrast, Nickel has continued its downwards trend, now trading below the lower boundary of its three-month rolling average. Brent Oil, at $72.94 per barrel, remains just below its three-month rolling average. Meanwhile, despite its recent history of extreme growth, new calculations show Gold has stabilized, currently priced at $2657 per ounce.
Additional Reading
The attached article by James Hyercyzk explores potential causes of this week’s sharp spike in natural gas prices, pointing to technical pressures, storage data, and weather forecasts. The commodity is currently priced at $3.36 per barrel. According to the U.S. Energy Information Administration (EIA), a 2 Bcf draw from storage was reported, which was less than the expected 3 Bcf draw. This indicated ample supply to the market and contributed to mid-week price declines. However, a cold snap in the Midwest likely pushed prices back up, with forecasts suggesting that this cold weather may extend southward, adding further uncertainty. As traders remain cautious, they are closely monitoring resistance at $3.444. December weather is expected to have an impact on natural gas prices, with both cold and mild conditions capable of impacting demand in different ways.