Big Draw in Gas Supply Sends Energy Prices Jumping

Refineries that make gasoline and other fuels swiftly cut back on production last week, the government reported Thursday, sending energy prices jumping across the board. Energy markets had largely brushed off a winter weather forecast this week for major winter storms in the East and icy, cold conditions even between Atlanta and Dallas.

The Energy Information Administration, however, reported Thursday that gasoline in storage fell by more than 5 million barrels at a time when most energy experts expected supplies to grow yet again. Refiners have been idling facilities because of a lack of demand at the same time that others have been shut down for routine maintenance. Earlier Thursday, the dollar hit a 52 week low and the surprise report on gasoline may have led some people to believe supplies are growing tight, said oil analyst Tom Kloza said.

"The ignition switch for a rally got hit twice today," Kloza said. For consumers, that may mean a slight drift upward in pump prices but not much, experts believe.
Crude and gasoline prices have remained relatively stable for months with no clear signs of an economic rebound. Prices began to rise late last week when Alcoa, which kicks off the U.S. earning season, reported that it had returned to profitability after three straight quarterly losses.....read the entire article

Open Interest Surge Signals Peak as Traders See Slump

Investors are snapping up commodities at the fastest pace in 18 months just as stockpiles of raw materials rise and shipping rates plunge, signaling that prices may be poised to fall. Open interest, or contracts yet to be closed, liquidated or delivered, rose 6.6 percent in the third quarter for the 20 most traded U.S. commodities, exchange data compiled by Bloomberg show. That’s the steepest gain since the first three months of 2008, just before the credit market freeze sent prices plunging from records.

While the U.S. economy shows signs of bottoming after the deepest financial crisis since the Great Depression, supplies of raw materials are growing faster than demand. Oil inventories rose 15 percent in the past year, Energy Department figures show. The Baltic Dry Index, a barometer for raw material demand, slid 41 percent in the third quarter. Alcoa Inc., the largest U.S. aluminum company, will report an adjusted loss of 83 cents a share this year, based on the average estimate of analysts. “We’ve been moving out of our commodity holdings and into cash,” said Peter Sorrentino, who.....Read the entire article