Crude Oil Moves Higher On Supply Concerns
The latest report from the Minerals
Management Service showed less than 1.5% of daily oil production has been
restored in the Gulf of Mexico. Gas production remained virtually unchanged from
yesterday.
Today’s shut-in oil production is equivalent to 98.59% of the
daily oil production, while shut-in gas production is equivalent to 79.97% of
the daily gas production (Full
report). Energy prices were mixed as Crude Oil and Natural Gas closed higher
but Harbor Unleaded Gasoline and Heating Oil closed lower.
On the economic front, the number of people filing for
first-time unemployment benefits dropped in the most recent week, with New
Claims coming in below economists’ expectations. The news sent treasury prices
lower across the yield curve.
The U.S. Labor Department revealed that initial jobless claims
came in at 356,000 for the week ended September 24, down 79,000 from the
previous week’s revised total. Economists had expected the number of claims to
drop, but they had, on average, predicted a more moderate decline to a level
around 400,000. In the most recent week, initial claims continued to be inflated
by filings from people impacted by Hurricane Katrina.
The 4-week moving average for initial claims, which flattens
out the week-to-week volatility, rose 8,500 to 385,500. Continuing claims for
the week ended on September 17, the most recent week for which the government
has data, rose 144,000 to 2.802 million.
The U.S. economy saw notable growth in the second quarter,
according to a report from the Department of Commerce, although it remains to be
seen how much economic growth will be impacted by hurricanes Katrina and Rita.
The Commerce Dept. said that second quarter GDP grew at an
annual rate of 3.3 percent, unchanged from the preliminary estimate but down
from the 3.8 percent growth seen in the first quarter. Economists had been
expecting second quarter GDP growth of 3.3 percent.
The report showed that the GDP growth in the second quarter
was partly due to strong consumer spending, which grew by 3.4 percent for the
quarter. This represents an upward revision from the 3 percent growth previously
reported. The GDP growth also reflected increased exports, equipment and
software spending, residential fixed investment, and government spending. The
growth was partly offset by a downturn in private inventory investment.
Additionally, the Commerce Dept. said that prices excluding
food and energy showed upwardly revised growth of 1.7 percent compared to the
preliminary estimate of 1.6 percent growth. The price growth still came in below
the 2.4 percent increase reported for the first quarter.
Reuters/Jefferies CRB Index Movers
| Commodity (symbol) |
Price | Price Change | % Change |
| Corn (C) | 203.50 | +0.25 | +0.12 |
| Soybeans (S) | 560.50 | -1.75 | -0.31 |
| Wheat (W) | 334.50 | +5.75 | +1.75 |
| Live Cattle (LC) | 90.05 | +1.33 | +1.49 |
| Lean Hogs (LH) | 63.40 | +0.30 | +0.48 |
| Platinum (PL) | 932.20 | +6.40 | +0.69 |
| Gold (GC) | 475.80 | +2.70 | ++0.57 |
| Silver (SI) | 755.50 | +15.20 | +2.05 |
| Copper (HG) | 173.95 | -0.85 | -0.49 |
| Cocoa (CC) | 1434.00 | +61.00 | +4.44 |
| Coffee (KC) | 92.95 | +0.05 | +0.05 |
| Sugar #11 (SB) | 11.14 | -0.11 | -0.98 |
| Cotton (CT) | 54.41 | +0.50 | +0.93 |
| Orange Juice (JO) | 101.15 | +0.65 | +0.65 |
| Crude Oil (CL) | 66.79 | +0.44 | +0.66 |
| Heating Oil (HO) | 215.75 | -1.11 | -0.51 |
| Natural Gas (NG) | 14.20 | +0.10 | +0.68 |
Economic News
Corporate Profits:
After-Tax Profits, Y/Y Change – Actual 31.5%
Gross Domestic Product:
Real GDP, Q/Q Change – Actual 3.3% Consensus 3.3%
GDP Deflator, Q/Q Change – Actual 2.6% Consensus 2.4%
Jobless Claims:
New Claims – Actual 356 K Consensus 400 K
Ashton Dorkins