Bloomberg News

Natural Gas Falls on Higher Production: Commodities at Close

July 10, 2012

The Standard & Poor’s GSCI gauge of 24 commodities fell 1.6 percent to 605.91 at 4:23 p.m. New York time. The UBS Bloomberg CMCI index of 26 raw materials dropped 1.2 percent to 1,505.034.

NATURAL GAS

Natural gas futures declined in New York after the government increased its estimate for production while forecasts for milder weather signaled lower demand from power plants.

Gas fell 5.1 percent after the Energy Department increased its 2012 production estimate by 0.7 percent on output from shale formations. Commodity Weather Group LLC predicted that moderate weather would replace above-normal temperatures in the Midwest, Northeast and California July 20 through July 24.

Natural gas for August delivery dropped 14.6 cents to settle at $2.737 per million British thermal units on the New York Mercantile Exchange. The futures, which rose to a six-month high of $3.06 on July 6, are down 8.4 percent this year.

U.S. natural gas market: {NI NUSMKT}

CRUDE MARKETS

Oil fell after Norway ended a strike that threatened to halt output by western Europe’s largest crude exporter and as U.S. equities decreased for a fourth day.

Futures dropped 2.4 percent in New York after Norway’s government ordered compulsory arbitration in the dispute, preventing a platform workers’ lockout scheduled to start at midnight yesterday. The drop in crude prices accelerated as the Standard & Poor’s 500 Index slipped on pessimism about earnings season and the euro fell to a two-year low against the dollar.

Crude oil for August delivery declined $2.08 to settle at $83.91 a barrel on the Nymex. Prices have decreased 15 percent this year.

Brent oil for August settlement fell $2.35, or 2.3 percent, to end the session at $97.97 a barrel on the London-based ICE Futures Europe exchange. Brent’s premium to West Texas Intermediate crude, the grade traded in New York, was at $14.06 a barrel, down from $14.33 yesterday.

Crude markets: {NI CRMKTS}

OIL PRODUCTS

Heating oil futures declined as China’s export rate fell and Norway ended the oil workers’ strike.

Futures slid as export growth in China slowed to 11.3 percent in June from 15.3 percent in May, according to customs data, the first contraction since January. Norway’s government intervened to stop the strike affecting crude output.

Heating oil for August delivery dropped 2.95 cents, or 1.1 percent, to settle at $2.7195 a gallon on the Nymex.

August-delivery gasoline slid 1.25 cents, or 0.5 percent, to settle at $2.7469 a gallon on the exchange.

U.S. oil products: {NI OPFMKT}

PRECIOUS METALS

Gold declined for the third time in four sessions after imports into China rose less than anticipated and the dollar gained, eroding the appeal of the precious metal as a hedge against inflation. Silver, platinum and palladium also fell.

China, the world’s largest buyer of everything from copper to soybeans, said imports rose 6.3 percent last month from a year earlier, less than the 11 percent gain estimated by economists in a Bloomberg survey. The dollar rose as much as 0.4 percent against a basket of six currencies.

Gold futures for August delivery slid 0.6 percent to settle at $1,579.80 an ounce on the Comex in New York.

Silver futures for September delivery fell 2 percent to $26.882 an ounce in New York.

On the Nymex, platinum futures for October delivery dropped 1.1 percent to $1,429.70 an ounce, retreating for the fourth straight session. Palladium futures for September delivery slid 1.3 percent to $576.60 an ounce.

Precious metal markets: {NI PCMKTS}

BASE METALS

Copper fell for the third time in four sessions after imports into China slumped to the lowest since August, adding to concern that demand is slowing.

Shipments slid 18 percent in June, the third drop in four months, according to customs figures from China, the world’s largest metals consumer. Total imports of all goods trailed the median estimate in a Bloomberg News survey of analysts. Copper also declined as the dollar rose against a basket of six currencies, reducing the appeal of commodities as alternative investments.

Copper futures for September delivery fell 1 percent to settle at $3.398 a pound on the Comex in New York. The metal dropped 8.6 percent last quarter on mounting concern that slowing global growth will erode demand.

On the London Metal Exchange, copper for delivery in three months fell 0.9 percent to $7,490 a metric ton ($3.40 a pound).

Nickel, tin, lead, zinc and aluminum also dropped in London.

Base metal markets: {NI BMMKTS}

SOFT COMMODITIES

Cocoa futures fell on speculation that Europe’s sagging economy will limit chocolate consumption. Sugar and orange juice also dropped. Coffee and cotton advanced.

Cocoa for September delivery declined 0.5 percent to settle at $2,307 a metric ton on ICE Futures in New York. The price has climbed 9.4 percent this year on concern that heavy rain in West Africa, the world’s top growing region, may curb output.

Raw-sugar futures for October delivery fell 0.9 percent to 22.49 cents a pound on ICE, the first drop in three sessions. Earlier, the sweetener reached 23.05 cents, the highest for a most-active contract since April 13.

Orange-juice futures for September delivery slid 0.6 percent to $1.282 a pound, the first loss in five sessions.

Arabica-coffee futures for September delivery advanced 1.2 percent to $1.845 a pound, the second straight gain.

Also in New York, cotton futures for December delivery increased less than 0.1 percent to 70.72 cents a pound.

Soft commodities markets: {NI SOMKTS}

GRAINS

Wheat fell for the second time in three sessions on speculation that cooler weather and rain in the northern U.S. Great Plains will ease stress on spring crops.

Rain during the weekend and yesterday in parts of North Dakota, the biggest U.S. wheat grower, and lower temperatures forecast this week will “favor” fields planted with spring grains, Telvent DTN said in a report today. Prices have surged 28 percent since the end of May as hot, dry weather parched fields from Texas to North Dakota.

On the Chicago Board of Trade, wheat futures for September delivery dropped 0.8 percent to settle at $8.2125 a bushel. The grain is up 26 percent this year.

Corn and soybeans fell on speculation that demand will ebb after prices surged following hot, dry weather.

Corn futures for December delivery, after the harvest, slid 1.7 percent to close at $7.175 a bushel on the Chicago Board of Trade. Yesterday, the price reached $7.33, the highest level for a most-active contract since Sept. 13.

Soybean futures for November delivery dropped 0.6 percent to $15.385 a bushel. The oilseed reached $15.7125 yesterday, the highest price since July 15, 2008.

U.S. grain markets: {NI GRMKTS}

LIVESTOCK

Hog futures fell for the first time in three sessions on speculation that U.S. meatpackers are slowing purchases after a jump in pork production. Cattle prices also dropped.

Meat processors slaughtered 788,000 hogs in the first two days of this week, down 6.5 percent from a week earlier, U.S. Department of Agriculture data show. Wholesale pork fell to 89.87 cents a pound yesterday, the lowest since June 13, and hogs for immediate delivery in the spot market dropped 3.3 percent to 92.77 cents a pound, the biggest decline since January, USDA data show.

Hog futures for August settlement declined 2 percent to settle at 92.075 cents a pound on the Chicago Mercantile Exchange. Prices are up 9.2 percent this year.

Cattle futures for August delivery fell 0.5 percent to $1.184 a pound in Chicago. The commodity has dropped 2.5 percent this year.

Feeder-cattle futures for August settlement slipped 0.6 percent to close at $1.4335 a pound on the CME.

Livestock markets: {NI LVMKTS}

To contact the reporter on this story: Dan Murtaugh in Houston at dmurtaugh@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net


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