Middle East tension boosts gas prices

Jun 14, 2013

Here is this week’s edition of Futures File, our weekly commodities wrap-up:

Corn grinding lower

Despite the poor weather conditions earlier this spring that delayed planting across much of the Midwest, America’s farmers likely planted a record corn crop, according to USDA estimates. A report released Wednesday projected a total corn crop of over 14 billion bushels, a jump from the previous record of 13.1 billion. The prospect such large production pushed prices lower this week, with December corn falling nearly 30 cents per bushel (-5.4%) to $5.30, the lowest price in three weeks.

As of the beginning of the week, over 25 million acres of corn and soybeans were left unplanted, leaving much uncertainty in the current USDA forecasts. Another report detailing planted acreage will be released at the end of June, giving the markets further insight into this year’s crop. Other analysts are still concerned that late-planted crops could have problems as they develop, reducing yields beneath current USDA estimates. For example, some note that the plants’ pollination period will be shifted later into July, when hot and dry conditions can interrupt pollination.

As of midday Friday corn for delivery in December (after this fall’s harvest) was worth $5.32 and November soybeans were worth $12.95 per bushel.

Petroleum jumps on mideast unease

Crude oil, gasoline and diesel fuel prices were all higher this week, rallying on increasing tensions in the Middle East. Protests in Turkey, upcoming elections in Iran, and the announcement that the United States will soon begin arming rebels in Syria all threaten to add to uncertainty to that region. Although the United States is becoming less dependent on foreign oil as domestic production increases, crude oil remains an internationally traded commodity, vulnerable to headlines from across the globe.

Meanwhile, strong economic data from the United States inspired optimism that the US economy would continue to gain strength, keeping demand for liquid fuels high. By midday Friday, crude oil had experienced a weekly rise of $2.23 (+2.3%) to $98.25 per barrel, the highest price in nine months. At the same time, gasoline gained two cents per gallon (+0.7%) and diesel futures spurted 7.1 cents (2.5%) higher.



Re: "The oil from the keystone Pipeline would be going overseas."

“Another insightful comment by bonehead.” - the Big Dog’s back, 6/5/13 :-7


Actually, the gas refined from the oil would be going overseas. Part of the reason gas is so expensive is we create an abundance and ship it overseas rather than keep it here and enjoy lower prices. World economy, like it or not, it is what it is.


Re: "The gas refined from the oil would be going overseas." (Professional courtesy) :)

Believe it when I see it. The libs in Congress hate fossil fuels but are protectionist when it comes to nat-gas.

Japan (for one) has and will be buying billions of cu. ft. of LNG as they make the transition from nukes.

If we keep it, the question becomes: Where do we store it AND at what cost?


I tried to edit after I saw it, thanks :). Our energy policy is quite a dilemma, I don't want to see our government nationalize it, we've seen what happened when the government got involved with medicine, healthcare and Social Security; it would be a disaster with bloated offices, waste and they would still pick winners and losers. I just hate paying high prices when we create an abundance and it gets shipped off into the world market. Like I said earlier, it is what it is.


Re: "I don't want to see our government nationalize it,"

Previous oil and gas regulations helped to cause the gas lines of the 1970s.

Deregulation helped to bring about our current increased production.

Based on my readings, the vast majority of this new production is being done on private lands, NOT federal.

Oil is "fungible." The price in one part of the world affects prices elsewhere.


Kinda interesting: Greece tried to sell their govt. owned nat-gas facilities the other day and there were NO takers.


Really are you ...

Keystone pipeline from Canada. North American oil, not United States oil.


Re: "North American oil, not United States oil."



Regardless: The Bakken oil which I ALSO referred to is mostly being shipped by rail which is EXPENSIVE.

H*ll, I kinda hope that the Canadians build a western pipeline and sell their oil to the Chinese, while thumbing their nose at the Clown-in-Chief.


"Previous oil and gas regulations helped to cause the gas lines of the 1970s". -- Really?

"On October 17, 1973, the Organization of Arab Petroleum Exporting Countries announced an oil embargo against the United States in retaliation for its support of Israel during the Yom Kippur War. ..... the embargo had a major effect. The price of gasoline shot upward, gasoline shortages were common, and rationing was considered."



Re: "Really?"

Better do some research on Pres. Nixon's wage and price controls.


Give support / links Contango, for your aversion of sensibility and reality.


Re: "Give support / links"

“I thought you were so smart?” – 4shizzle, 6/4/13 :-7

Do your own work - I found it in about 1 min.


Ok smart guy, give me a link for your aversion of sensibility and reality


Yes, I changed it.


Dodge and deflect again, contango?


“If there was a law against idiocy, (4shizzle) would be on death row.” – 4shizzle, 6/13/13 :-7


You changed it.

I refuted you contango, you lose.


“You speak an abundance of feces..” – 4shizzle, 5/31/13


You lose contango


“Later Satan's channel.” – 4shizzle, 6/5/13 :-7


You lose , little person


BD so what if it does go overseas at the very least it would close the gap on our trade deficit and it dosen't seem that would be such a bad thing to happen.


The Big Dog's back
Sat, 06/15/2013 - 10:30am

The oil from the keystone Pipeline would be going overseas.


Keystone is not for exports and the kool-aid drinkers who believe that are just trying to mislead the public.

The Big Dog's back

Keystone XL would have diverted Canadian oil from refineries in the Midwest to the Gulf Coast where it could be refined and exported. Many of these refineries are in Foreign Trade Zones where oil may be exported to international buyers without paying U.S. taxes.


Re: "...refined and exported."

To quote you: "Bullspit." :-7


And the coal goes now, to places that burn it without pollution control. Go figure.


The Big Dog's back

So, are we ready to nationalize our energy like every other country in the world or are we just gonna keep letting a few people control it and get richer.


Re: "So, are we ready to nationalize our energy..."

“I am a Federal Agent working out of Langley Virginia,"

- the Big Dog’s back aka brutus smith, Oct. 30, 2010

WHAT you don't know? :-7

Woody Hayes

Are you Canadian? You sound like one the way you whine all the time.


I don't know Contango personally, but I am pretty sure he is an American, he probably is a Libertarian by nature and prefers to let the market control prices and resources. Do you know why prices continue to rise even though wages remain stagnant? I was doing some research about this earlier today...The current monetary policy we have now expands the money supply without regard to the ability of the manufacturing sector to expand the supply of goods and services and the direct result is inflation. The Fed can't keep printing (digitizing 85B per month) and not expect prices to go up. Prices of goods and services are based on what the believed perception of the money supply is, with the fractional reserved banking system we have the goal keeps moving as a result prices continue to trend upward. Contango, if you're Canadian and I spoke out of place, no disrespect intended :)


Re: "...if you're Canadian,"

Nope. Knew a few in Chicago. They had an organization called the "Canadian Club." :)

Speakin' of Canada: Ontario drills hundreds of oil and nat-gas wells in and around Lake Erie and have done so for decades.