Crude Oil Update

Despite the huge run up for crude oil prices - seen in the last ten years (up more then 1000%) there is no sign that the long term top is in. looking at the long term linear and logarithmic charts below you can see that higher highs are certainly possible.








Obviously anything that goes up can go down but the crude oil market enjoys an ever increasing demand , low above ground inventories / consumption ratio and 100's of millions of consumers that are willing to pay increasing prices at the pump. Currently there are no major reports of immediate oil shortage, the price seems to be the major factor which keeps the supply demand balance in check.

Palladium

Not all commodities are at new all time highs.

Palladium for example is about 60% below its 2001 highs. This volatile metal was trading anywhere between ~1100$ and less then 100$ over the last 30 years.

There are several ways to invest, trade and speculate in palladium:

1) Physical palladium: Palladium ETF (LSE: PHPD) and palladium maple coins.

2) Palladium derivatives: Futures (Nymex: PA)

3) Palladium mining stocks: SWC, PAL.

Crude Oil update

September Crude Oil (CLU7) bottomed at 54.30$ after topping out at 79.90$.

Still unclear if current level is sustainable.

Resistance between 77$ – 79.90$.

Support between 69$ - 70$.



Crude Oil(CLU7) weekly chart

Uranium Futures (NYMEX: UX)

Uranium futures contracts are currently available for trading on the New York Mercantile Exchange (NYMEX). The new contract was issued early this month and it is tradable on the CME Globex and Nymex clearport systems.

Specification:

Each contract represents 250 pounds of U308

Tick = 0.05$, tick value = 12.5$

Initial Margin for non members is running around 3375$ per contract.

Financially settled, price is based on the UxC index. – You can trade it but can't get the stuff.


According to the NYMEX data, the front month open interest (June 07) is just 17 contracts, a cold start I must say.

Can you put a channel on this chart?

Uranium chart – 5 years





Support around 105$.


Uranium long term chart (37 years)

Commodities Market News

Goldman May Buy Stake in India's Commodity Exchange

June 29 (Bloomberg) -- Goldman Sachs Group Inc., the world's biggest securities firm, plans to buy a stake in India's National Commodity & Derivatives Exchange Ltd. to gain from a surge in trading in Asia's second-fastest growing major economy.

Goldman will buy the stake from ICICI Bank Ltd., India's second-largest lender, two people familiar with the matter said, asking not be identified before an official announcement. Edward Naylor, a Goldman spokesman in Hong Kong, and Vishakha Mulye, chief financial officer of ICICI Bank, declined to comment.

Trading on India's commodity exchanges totaled $460 billion in the year ended March 31, a fourfold jump from the year before, as economic growth boosted disposable incomes and fueled investments in commodities. That spurred Fidelity International Ltd., a unit of the world's biggest money manager, in February to pay $49 million for 9 percent of the Multi Commodity Exchange of India Ltd., the world's third-biggest bullion bourse.

``It's a good move as commodity exchanges in India are just taking off and are in a growth phase,'' said Sanjay Dongre, a fund manager at UTI Mutual Fund, which oversees about $6.6 billion in investments. ``One could expect turnover at commodity exchanges to rise and an investor could reap benefit.''

Goldman may buy 10 percent of the National Commodity Exchange, India's Economic Times and Financial Express newspapers reported today, citing unidentified people. The investment may be Goldman's biggest in India since the company ended a 10-year venture with Kotak Mahindra Bank Ltd., an Indian lender, in March.

Goldman would invest in private equity, fund-to-fund and real estate businesses in India, Brooks Entwistle, head of the company's Indian operations, said in March.

India, the world's biggest consumer of gold and second- biggest producer of sugar and rice, trades futures contracts in more than 80 commodities in 500 locations.

Local traders and producing and consuming companies are the main participants on the bourses. S. Sundareshan, chairman of the Forward Markets Commission, said last month the regulator may permit overseas investors to trade in oil and bullion futures before expanding the list to include some farm products.

Buying a stake in the exchange will allow Goldman to ``capture the volume growth in the commodity derivatives business,'' Vineet Bhatnagar, managing director at Man Financial Commodities India Ltd., a Mumbai-based brokerage, said by telephone from Singapore.

Volume on the National Commodity Exchange, which trades futures contracts in 48 commodities, reached $226 billion in the year ended March 31, according to the Forward Markets Commission. That's more than the $184 billion of shares traded on the Mumbai stock exchange, Asia's oldest, in the same period. -source



Nymex looking to start gold futures trade in China

BEIJING (XFN-ASIA) - The New York Mercantile Exchange (Nymex) is hoping to begin the trading of gold futures contracts in China, the Wall Street Journal said, citing a senior exchange official

John Hanemann, vice chairman of the governors committee of Nymex's Comex Division, was quoted by the newspaper as saying the exchange has been in talks about launching its gold futures contracts with Chinese exchanges

China, meanwhile, has been looking to further develop its local derivatives markets, the report said

"We have been seeking opportunities to cooperate with Shanghai Gold Exchange to launch gold futures, perhaps as a joint product," Hanemann said

The plan, if it goes through, will not only see the first gold futures contracts being traded in China, but would also be the first joint derivatives product between a Chinese bourse and an overseas exchange, the newspaper reported

Currently, the trading of gold bullion, gold bars and platinum on the Shanghai Gold Exchange is limited to spot transactions. Chinese investors are not allowed to trade futures on overseas exchanges, the newspaper said

This also applies to state-controlled institutions, except those that have special licenses from the government. China's futures markets are also off-limits to foreign investors, the report said

Hanemann did not provide a timeframe for the launch of such a product, which is still being deliberated by the China Securities Regulatory Commission. The regulators are likely concerned about the risks of derivatives trading, the newspaper said

China is the world's fourth-largest gold producer and consumer

Last week, the China's central bank suggested the country can convert part of its foreign exchange reserves to gold holdings to head off risks from the depreciation of the US dollar, state media reported

Converting part of foreign exchange reserves to gold can protect and increase the reserve assets, the official Shanghai Securities News reported - source

NYMEX and Multi Commodity Exchange of India Sign Licensing Agreement

Global energy contracts now available on Indian platform

NEW YORK and MUMBAI, India, June 6 /PRNewswire/ -- The New York
Mercantile Exchange, Inc. (NYMEX), and the Multi Commodity Exchange of
India Limited (MCX) announced today that they have signed a five-year
licensing agreement for the use of NYMEX energy futures settlement prices.
In addition to the current MCX rupee-denominated, financially settled
light sweet crude oil futures contract, which is one-tenth of the size of
the NYMEX light sweet crude oil futures contract, the new licensing
agreement includes rupee-denominated natural gas, heating oil, and gasoline
futures contracts that MCX plans to launch. These new contracts will be
financially settled by MCX based on the settlement prices for the
corresponding physically settled NYMEX futures contracts and one-tenth of
the size of the NYMEX contracts. The agreement also anticipates the launch
of additional rupee-denominated contracts in RBOB gasoline and propane
futures.
Celebrating the agreement, India's Union Minister of Agriculture,
Consumer Affairs, Food & Public Distribution, Sharad Pawar, marked the
commencement of trading with the traditional ringing of the opening bell at
NYMEX in New York.
In October 2005, NYMEX and MCX signed a memorandum of understanding
that allows MCX to use NYMEX settlement prices for its light sweet crude
futures contract.
James E. Newsome, NYMEX President and Chief Executive Officer, said,
"This agreement with MCX will provide a benchmark price reference for risk
management to the Indian energy sector, a significant user of such products
from the global standpoint, while also optimizing the cost of such risk
management."
Venkat Chary, Chairman of the MCX, added, "Producers, users and
investors in India can take benefit from access to globally aligned prices
and trading practices in such energy products. We proudly bring these
products to the Indian industry."
Jignesh Shah, Managing Director and Chief Executive Officer of MCX
said, "MCX will leverage its pan-India presence, and its member and client
network spread across the country, to offer mini-NYMEX energy contracts to
a range of stakeholders in the industry. It will also facilitate the price
discovery of these products in the Indian time zone based on local
fundamentals."
About the New York Mercantile Exchange:
The New York Mercantile Exchange is the largest physical commodity
exchange in the world, offering futures and options trading in energy and
metals contracts and clearing services for off-exchange energy
transactions. Through a combination of open outcry floor trading and
electronic trading, a wide range of crude oil, petroleum product, natural
gas, coal, electricity, gold, silver, copper, aluminum, and platinum group
metals markets are available virtually 24 hours each day.
About Multi Commodity Exchange:
MCX is an independent and de-mutualised exchange with permanent
recognition from the Government of India to facilitate nationwide online
trading, clearing and settlement operations for the commodities futures
market. MCX is the world's second largest silver exchange and third largest
gold exchange in terms of trading volume among the top ten commodities
derivatives exchanges in the world. MCX offers futures trading across a
range of market segments including bullion, energy, ferrous and non-ferrous
metals, agricultural and industrial products. Promoted by Financial
Technologies (India) Ltd. a provider of transaction automation
technologies, the key shareholders of MCX include State Bank of India
(India's largest commercial bank) and its subsidiaries, National Stock
Exchange (NSE), National Bank for Agriculture and Rural Development
(NABARD), and several other Indian banks.
Forward Looking and Cautionary Statements
This press release may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act, with respect to
our future performance, operating results, strategy, and other future
events. Such statements generally include words such as could, can,
anticipate, believe, expect, seek, pursue, and similar words and terms, in
connection with any discussion of future results. Forward-looking
statements involve a number of assumptions, risks, and uncertainties, any
of which may cause actual results to differ materially from the
anticipated, estimated, or projected results referenced in forward-looking
statements. In particular, the forward-looking statements of NYMEX
Holdings, Inc., and its subsidiaries are subject to the following risks and
uncertainties: the success and timing of new futures contracts and
products; changes in political, economic, or industry conditions; the
unfavorable resolution of material legal proceedings; the impact and timing
of technological changes and the adequacy of intellectual property
protection; the impact of legislative and regulatory actions, including
without limitation, actions by the Commodity Futures Trading Commission;
and terrorist activities and international hostilities, which may affect
the general economy as well as oil and other commodity markets. We assume
no obligation to update or supplement our forward-looking statements.

source

NYMEX to change margins for silver, copper futures contracts

Washington (Platts)--18Apr2006

The New York Mercantile Exchange on Tuesday announced margin changes for
its silver and copper futures contracts, beginning at the close of business on
Wednesday.

Margins for the silver futures contract will increase to $3,750 from
$3,250 for clearing and non-clearing members and to $5,063 from $4,388 for
customers. Margins for the copper futures contract will increase to $3,750
from $3,500 for clearing and non-clearing members and to $5,063 from $4,725
for customers. source

Heating Oil Futures (NYMEX : HO)

Heating oil, or burning oil, also known in the United States as No. 2 fuel oil or "offroad diesel" and elsewhere as "red diesel", is a low viscosity, flammable fluid used to fuel building furnaces ("boilers"). It is delivered by tank truck to individual homes and stored in tanks in the basement or (possibly buried) in Underground Storage Tanks (or "USTs").

Heating oil accounts for about 25% of the yield of a barrel of crude, the second largest "cut" after gasoline. The heating oil futures contract trades in units of 42,000 gallons (1,000 barrels) and is based on delivery in New York harbor, the principal cash market trading center. Options on futures, calendar spread options contracts, crack spread options contracts, and average price options contracts give market participants even greater flexibility in managing price risk.

The heating oil futures contract is also used to hedge diesel fuel and jet fuel, both of which trade in the cash market at an often stable premium to NYMEX Division New York harbor heating oil futures.

The Exchange also lists for trading on the NYMEX ClearPort trading platform a series of heating oil swap futures contracts based on crack spreads, location differentials, and differentials between NYMEX Division New York harbor heating oil futures and jet fuel and diesel fuel. Transactions in these contracts can also be consummated off-Exchange and submitted to the Exchange for clearing through the NYMEX ClearPort clearing website.

Propane Futures (NYMEX : PN)

Propane is a three-carbon alkane derived from other petroleum products during oil or natural gas processing. It is commonly used as a heat source for engines, barbecues, and homes. Its name was derived from propionic acid.

Propane is a by-product of natural gas processing and oil refining. U.S. demand is approximately one-third that of heating oil. Propane is used in diverse markets: residential cooking, crop-drying in agriculture, space heating in homes and industry, in motor vehicles and as a feedstock for the production of vital petrochemicals. Natural gas utilities often store propane for use during periods of peak demand.

The NYMEX Division propane contract trades in units of 42,000 gallons (1,000 barrels). It provides an effective pricing and risk management tool for the gas liquids sector of the energy industry. The contract is a natural complement to the NYMEX Division crude oil, heating oil, gasoline, and natural gas futures contracts.

Crude Oil Futures - NYMEX

Click on chart to enlarge

Natural Gas Futures

Natural gas accounts for almost a quarter of United States energy consumption, and the NYMEX Division natural gas futures contract is widely used as a national benchmark price. The futures contract trades in units of 10,000 million British thermal units (mmBtu). The price is based on delivery at the Henry Hub in Louisiana, the nexus of 16 intra- and interstate natural gas pipeline systems that draw supplies from the region's prolific gas deposits. The pipelines serve markets throughout the U.S. East Coast, the Gulf Coast, the Midwest, and up to the Canadian border. An options contract and calendar spread options contracts provide additional risk management opportunities.


The NYMEX mini natural gas futures contract, designed for investment portfolios, is the equivalent of 2,500 mmBtu of natural gas, 25% of the size of a standard futures contract. The contract is available for trading on the NYMEX Clear-Port electronic trading platform and clears through the New York Mercantile Exchange clearinghouse.

Crude oil Futures

Crude oil is the world's most actively traded commodity, and the NYMEX Division light, sweet crude oil futures contract is the world's most liquid forum for crude oil trading, as well as the world's largest-volume futures contract trading on a physical commodity. Because of its excellent liquidity and price transparency, the contract is used as a principal international pricing benchmark. Additional risk management and trading opportunities are offered through options on the futures contract; calendar spread options; crack spread options on the pricing differential of heating oil futures and crude oil futures and gasoline futures and crude oil futures; and average price options.

The contract trades in units of 1,000 barrels, and the delivery point is Cushing, Oklahoma, which is also accessible to the international spot markets via pipelines. The contract provides for delivery of several grades of domestic and internationally traded foreign crudes, and serves the diverse needs of the physical market.


The NYMEX mini crude oil futures contract, designed for investment portfolios, is the equivalent of 500 barrels of crude, 50% of the size of a standard futures contract. The contract is available for trading on the NYMEX Clear-Port electronic trading platform and clears through the New York Mercantile Exchange clearinghouse.

Natural Gas NYMEX