Crude Oil Falls As Calm Prevails

Today’s unexpected drop in Q4
Productivity got the session of to a lively start.

The Department of Labor reported the first drop in
productivity since the Q1, 2001 and the biggest drop since Q3, 2000

Initial Jobless Claims also showed an unexpected decline

but the report had little impact on the markets ahead of tomorrow’s January
Employment Report.

Treasuries closed flat, after hitting the lowest
level in almost 2-months earlier in the day. The Yen was the main mover in the
forex market today, hitting 7-week lows versus the US Dollar and the Euro.

The EIA reported that Natural Gas Stockpiles fell 88
BCF last week. The news failed to help Natural Gas which declined along with all
the other energies. Crude Oil traded as high as $69 yesterday but closed at
$64.80 today, a 3-week low. News that the US won’t immediately seek UN sanctions
against Iran eased traders fears about possible supply disruptions.

All the grains closed higher, with Wheat hitting its
highest level in more than 3-months as drought conditions persist. The softs
were mixed with Cocoa and Orange Juice closing lower, while Coffee, Sugar and
Cotton closed higher. The US Congress voted to end its Cotton subsidy program on
August 1.

Economic News

Productivity Down 0.6% In Q4; Unit Labor Costs Up 3.5% (report).

Initial Jobless Claims Down 11,000 To 273,000 (report).

EIA: Natural Gas Stockpiles Fell 88 BCF Last Week

Ashton Dorkins

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