Bloomberg News

Natural Gas Drops Most in Five Weeks: Commodities at Close

November 26, 2012

The Standard & Poor’s GSCI Spot Index of 24 raw materials fell 2.81 points, or 0.4 percent, to settle at 646.99 at 3:48 p.m. in New York, led by natural gas.

The UBS Bloomberg CMCI gauge of 26 prices fell 3.1058, or 0.2 percent, to 1,577.391.

NATURAL GAS

Natural gas tumbled the most in five weeks as revised forecasts showing an unusually warm start to December signaled reduced demand for heating fuels.

Futures fell 4.4 percent, closing with the biggest one-day decline since Oct. 22, as companies including Commodity Weather Group LLC predicted above-normal temperatures for the lower 48 states in the next six to 10 days. Gas rose to a 13-month high last week on forecasts showing colder weather in early December and a government report of a bigger-than-expected supply drop.

Natural gas for December delivery fell 17.1 cents to $3.73 per million British thermal units on the New York Mercantile Exchange.

CRUDE OIL

Oil dropped as euro-area finance ministers met to negotiate a bailout payment for Greece and as U.S. leaders prepared to wrestle with a budget agreement.

Futures declined 0.6 percent as officials gathered in Brussels to discuss Greek aid less than a week after a meeting failed to yield an agreement. Republicans and Democrats in the U.S. need to find a budget compromise to avoid triggering $607 billion in tax gains and spending cuts starting in January.

Crude oil for January delivery declined 54 cents to settle at $87.74 a barrel on the Nymex. Prices are down 11 percent this year.

Brent oil for January settlement fell 46 cents, or 0.4 percent, to end the session at $110.92 a barrel on the London- based ICE Futures Europe exchange.

OIL PRODUCTS

Heating oil and gasoline declined as refinery starts in the U.S. signaled that production rates and supplies will climb.

Futures fell as Phillips 66 was scheduled to restart a fluid catalytic cracker today in Borger, Texas, and reported a startup at the Bayway plant in New Jersey, shut since Hurricane Sandy struck Oct. 29. Motiva Enterprises LLC said it would begin reopening a crude unit at its Port Arthur, Texas, refinery this month or in early December.

December-delivery heating oil slid 3.06 cents, or 1 percent, to settle at $3.0465 a gallon on the Nymex, the first decline in three days.

Gasoline for December delivery declined 1.76 cents, or 0.6 percent, to settle at $2.7263 a gallon.

PRECIOUS METALS

Gold futures fell for the first time in three sessions as the dollar’s rebound eroded the appeal of the precious metal as an alternative asset.

The greenback gained for the first time in a week against the euro as European Union finance ministers gather in Brussels to decide on aid for Greece. On Nov. 23, optimism on Greece helped send gold to $1,755 an ounce, the highest since Oct. 17.

Gold futures for December delivery slid 0.1 percent to settle at $1,749.60 on the Comex in New York. The price has climbed 12 percent this year.

Silver futures for March delivery rose 0.1 percent to $34.229 an ounce on the Comex. Earlier, the price reached $34.315, the highest level since Oct. 11.

Platinum futures for January delivery fell 0.4 percent to $1,611 an ounce on the Nymex.

Palladium futures for December delivery dropped 1 percent to $661.20 an ounce.

BASE METALS

Copper rose in New York, extending the biggest weekly gain since mid-September, on speculation that European officials will clear aid to Greece and keep the country solvent, boosting prospects for demand.

European finance chiefs resumed talks on a bailout payment for Greece today after negotiations stalled last week. A deal is “practically finalized, there are just a few centimeters to go,” French Finance Minister Pierre Moscovici said. Prices are down 5.6 percent this quarter as Europe’s debt crisis threatened global growth.

Copper futures for delivery in March climbed 0.3 percent to settle at $3.5485 on the Comex. Last week’s 2.2 percent increase was the biggest since the week of Sept. 14.

On the London Metal Exchange, copper for delivery in three months rose less than 0.1 percent to $7,780 a metric ton ($3.53 a pound).

Aluminum and zinc were also higher in London. Tin, lead and nickel fell.

SOFT COMMODITIES

Cotton futures gained the most in five weeks on signs of rising demand for supplies from the U.S., the world’s largest exporter. Coffee extended a slump to a 29-month low. Cocoa fell, while orange juice and sugar climbed.

Net U.S. sales of upland cotton surged 59 percent in the week ended Nov. 15 from a week earlier, government data show. The price has tumbled 21 percent this year as global inventories swelled.

Cotton for March delivery climbed 1.7 percent to settle at 72.62 cents a pound on ICE Futures U.S. in New York, the biggest advance for a most-active contract since Oct. 17.

Arabica-coffee futures for March delivery declined 1.3 percent to $1.489 a pound. Earlier, the price touched $1.476, a two-year low. Inventories monitored by ICE have jumped 63 percent this year.

Cocoa futures for March delivery dropped 1.5 percent to $2,478 a metric ton, snapping a four-session rally.

Orange-juice futures for January delivery jumped 1.2 percent to $1.2745 a pound. Earlier, the price reached $1.295, the highest since Sept. 17.

Raw-sugar futures for March delivery rose 0.1 percent to 19.15 cents a pound.

LIVESTOCK

Hog futures dropped on concern that efforts by U.S. lawmakers to avoid the so-called fiscal cliff will end up hurting the economy and demand for higher-priced foods including meat. Cattle futures also fell.

The Standard & Poor’s 500 Index of equities headed for the biggest decline since Nov. 14 in New York as lawmakers worked on a budget deal to avoid automatic spending cuts and tax increases, known as the fiscal cliff. Meatpackers processed 433,000 hogs today, down 0.5 percent from a week earlier, U.S. Department of Agriculture data show. Wholesale-pork prices fell 0.4 percent last week, the second straight drop.

Hog futures for February settlement declined 0.5 percent to close at 86.975 cents a pound on the Chicago Mercantile Exchange. Earlier, the price climbed as much as 0.8 percent.

Cattle futures for February delivery fell 0.2 percent to $1.324 a pound on the CME. The commodity reached $1.32925 on Nov. 23, the highest ever for a most-active contract.

Feeder-cattle futures for January settlement dropped 0.4 percent to $1.4735 a pound in Chicago.

GRAINS, OILSEEDS

Soybean futures climbed to a two-week high as planting was delayed in South America. Grains advanced as U.S. winter-wheat conditions were the worst in at least 27 years.

Rain in the past three days slowed soybean seeding in parts of Argentina, with more precipitation expected beginning Nov. 29, T-Storm Weather LLC said in a report. Dry weather this week in southern Brazil and Paraguay will increase stress on newly planted crops, the company said.

Soybean futures for January delivery rose 0.4 percent to close at $14.2475 a bushel at 2 p.m. on the Chicago Board of Trade. Earlier, the oilseed reached $14.355, the highest for a most-active contract since Nov. 12. Last year, the U.S. was the world’s biggest exporter, followed by Brazil and Argentina.

Wheat futures for March delivery gained 0.3 percent to settle at $8.6375 a bushel in Chicago. Earlier, the price reached $8.69, the highest since Nov. 15.

Corn futures for March delivery increased 0.2 percent to $7.5125 a bushel. Earlier, the grain climbed to $7.57, the highest since Nov. 9.

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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