Primary Commodities Report for May 12th - May 16th

By: Isha Khan, The Quinnipiac University Global 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 is measured in barrels. Natural Gas is measured in MMBtu (Million British Thermal Units), Gold is per troy ounce, and for Nickel the price reflects price per share of (NIKL) ETF. They are all indexed to be at 100 at the start of the period.

In the period from May 9th – May 16th Natural Gas (green) seems to be the biggest mover. Natural Gas prices seemed to decrease gradually from the 9th to the 13th where it stood at 3.9% below the baseline. Then the price decreased sharply, ending the period at ~12% below the baseline. Gold (yellow) was the other commodity showing an overall decrease in the week and declining to 4.6% below the baseline at the end of the week. Nickel (red) and Brent Oil (black) both showed similar staggering increases through the week ending at ~3.5% and ~2.5% above their baselines respectively.

Commodities Historical Trends

Source: Yahoo Finance and own calculations. Rates are in United States dollars per one (1) unit of goods. Brent Crude Oil is measured in barrels. Natural Gas is measured in MMBtu (Million British Thermal Units), Gold is per troy ounce, and for Nickel the price reflects price per share of (NIKL) ETF. 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 we hit the middle of May, Nickel (red) seems to be the biggest mover. Nickel price continues its upward trend that started after the first week of April, and broke the upper bound at the beginning of this week. Brent oil price began rising since the sharp decline at the end of April and rose back above the lower bound this week. Gold price (yellow) dropped back below the upper bound this week from the high of $3485/troy oz that it had hit at the end of April. Natural Gas (green) began declining following its trend of a staggering decline with the only significant increase in price being one at the end of April going through the beginning of May. Lastly, Brent Oil price(black) rose above the lower bound ending this week at $65.41/barrel.

Additional Reading

Natural Gas News: Inventory Builds and Cool Temps Set Bearish Tone for Next Week | FXEmpire

With more inventory building up and cooler temperatures natural gas prices are looking like they are going to decrease. Although there have been spikes in heat in certain regions the aggregate demand for natural gas has not reflected that. Until the demand for cooling increases and subsequently the demand for natural gas increases the price of natural gas will continue to decrease as inventory stockpiles.