Welcome to today’s Morning Coffee Break – U.S. markets are getting ready for the final session of a losing week. Markets suffered on increasing focus and concern over the looming fiscal cliff. Opinions surrounding the fiscal cliff differ from one extreme to the other.
Oil prices may continue to fall in the near-term, with WTI potentially reaching $80.00 over the next few weeks. December WTI will expire today, and could lead to a similarly lopsided trade as yesterday’s expiration of December Brent.
The overnight markets are starting to show signs of life again, but considering the bean market is down nearly 10% since the first of the month things are just trying to get its footing again before it starts to run.
A mid-morning attack by Israel of a Hamas leader yesterday sent the oil market higher, but unless the tensions escalate in the near-term, we would anticipate prices to continue moving lower
Natural Gas traded sharply higher settling $3.739 up $0.169, 4.5%. The curve was much firmer 13/17 $0.09 tighter. Hub cash was firmer, ~$0.11 back this morning, Z-6 up $0.30 to $4.00. Algonquin traded up to $8.75 this morning, highest spot price of the year.
Look for the slow drift lower to continue in the near-term, as worries about the health of the economy and the fiscal cliff dominate. Stocks sold off yesterday on various corporate and European news items, but closed near the bottom of last week’s trading range as well as close to a new four-month low.
Daily Energy Report – The slow drift lower in oil prices should continue in the near-term, as worries grow over the fiscal cliff and the slow rate of economic growth. WTI could fall toward $80.00/bbl over the next few weeks as fiscal cliff negotiations appear likely to continue through the end of the year, U.S. production continues to grow, U.S. inventories remain elevated, and as problems in Europe remain in place
Energy Price Outlook After a sobering week last week, oil prices are expected to be under pressure again in this week’s trade and potentially fall toward $80/bbl in WTI over the next few weeks. The dominant factors should be increased prospects for slow growth in the U.S., uncertainty over the fiscal cliff, events in Europe including Sunday’s vote in Greece, and OPEC’s cut in demand estimates on Friday. The
Natural Gas traded lower settling $3.554, down $0.145 (3.8%). The curve was weaker 13/17 $0.04 lower. Hub cash was much weaker, ~$0.25 back this morning, Z-6 down $0.10 to $3.60. The 12z was in line with overnight models during the 6-10 day (warming East, cooler West).
Published Friday morning, 11/2/12 The overnight markets are easing due to the fact that FCS issued its estimates yesterday afternoon and to no surprise the bean yield was raised to 39.1 with overall production at 2.959b. The corn yield was also raised to 124 which is a bit surprising with overall production at 10.884. The markets as of 8CST are trading down 7-8 in the old crop beans while
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