December 28th, 2011

Gasoline futures fell the most in two weeks on speculation that demand for the motor fuel won’t improve as consumption has failed to keep pace with 2010 levels.

Gasoline futures declined for the first time in seven sessions as consumption in the four weeks ended Dec. 16, measured by deliveries to wholesalers, was 4.7 percent below a year earlier, Energy Department data show. Retail gasoline use through Dec. 23 was down 1.6 percent from 2010, according to MasterCard Inc. (MA)’s SpendingPulse report today.

“There’s continued decline in gasoline demand in a year- on-year comparison,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

Gasoline futures for January delivery fell 4.1 cents, or 1.5 percent, to $2.6478 a gallon at 2:13 p.m. on the New York Mercantile Exchange, after touching a low of $2.6388. Prices are up 7.9 percent this year, after rising as much as 41 percent through April 29.

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December 29th, 2011

Heating oil futures rose as jobless claims slid to a three-year low over the past month and cooler weather was forecast for the U.S. Northeast in January.

Heating oil futures gained after Labor Department figures showed the four-week moving average for claims, a less volatile measure than the weekly figures, dropped to 375,000 last week, the lowest level since June 2008. The National Weather Service’s Climate Prediction Center forecast lower-than-normal temperatures Jan. 5-11 from Maine to Florida.

“Not only are we going to have a return of winter but the U.S. economy is improving and that should improve the demand for diesel and even gasoline,” said Phil Flynn, vice president of research at PFGBest in Chicago.

Heating oil futures for January-delivery rose 2.45 cents, or 0.9 percent, to $2.9179 a gallon at 1:09 p.m. on the Nymex. Prices are heading for a 15 percent gain in 2011.

In other indications of a strengthening economy, the Institute for Supply Management-Chicago Inc. said its business barometer (CHPMINDX) was little changed at 62.5 from a seven-month high of 62.6 a month earlier. The index of signed contracts (USPHTMOM) to buy previously owned houses increased 7.3 percent in November, the National Association of Realtors said.

Distillate stockpiles rose 1.21 million barrels (DOESDIG5) to 140.4 million in the week ended Dec. 23, the Energy Department reported today. Inventories of industrial, shipping and heating fuels are 13 percent below year-earlier levels.

Demand (DOEDDIST) for distillates fell 14 percent to 3.8 million barrels a day, the lowest level in four weeks. The four-week average consumption was 3.9 percent above a year earlier.

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December 30th, 2011

Corn traders are bullish for a fifth consecutive week on speculation that dry weather in South America is damaging crops, boosting demand for U.S. supplies at a time when stockpiles are predicted to shrink to a 16-year low.

Nineteen of 25 traders surveyed by Bloomberg expect corn to advance next week. Lower-than-average humidity and dry soil will curb crop development in Argentina and southern Brazil through at least Jan. 7, according to T-Storm Weather LLC, a forecaster in Chicago. Argentina is the world’s biggest corn shipper after the U.S. and typically starts reaping its grain in March.

While prices doubled in the past two years as record demand eroded inventories, corn fell as much as 27 percent since the end of August as the U.S. forecast the biggest-ever global harvest. The grain rallied 10 percent in the past two weeks on mounting concern that South American weather will undermine that prediction and drive stockpiles lower. Argentina and Brazil are expected to produce 90 million metric tons, enough to supply the 27-nation European Union for 17 months, USDA data show.

“We have already caused irreversible damage to the corn crop,” said Dave Marshall, a farm marketing adviser at Toay Commodity Futures Group LLC in Nashville, Illinois. “The dry weather trend of the past five weeks probably already lowered production 5 to 7 million tons below the USDA forecasts.”

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December 24th, 2011

President Barack Obama’s re-election campaign returned campaign contributions from Jon S. Corzine, former chairman and chief executive officer of MF Global Holdings Ltd., according to a Democratic official.

Obama for America and the Democratic National Committee refunded the money from the former New Jersey governor out of an abundance of caution, said the official, who requested anonymity. Republicans have criticized the president for keeping contributions from the head of a firm that collapsed and filed for bankruptcy.

Corzine, 64, and his wife, Sharon Elghanayan, each contributed $30,800 to the Democratic National Committee and $5,000 to Obama’s campaign, the maximum amounts that individuals are allowed to give, said the official. Corzine, who testified before a congressional panel about MF Global’s bankruptcy and $1.2 billion in missing customer funds, has been one of Obama’s top fundraisers this election cycle. In April, Corzine hosted a fundraiser for Obama at his Manhattan home.

Corzine was one of 41 donors who bundled more than $500,000 this year for Obama’s re-election effort, according to documents released by the campaign Oct. 14. So-called bundlers arrange for contributions from other people and funnel the money to campaigns.

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December 29th, 2011

FOREX-The euro tumbled to its lowest level against the dollar since September 2010 in thin European trading Thursday after Italy’s final bond auctions of 2011 proved less than outstanding and year-end flows continued to support the dollar.

The single currency fell to $1.2858 against the dollar, extending Wednesday’s declines, while it also took a hit against the safe-haven Swiss franc and yen, falling to a fresh 10-year low against the Japanese currency.

Italy’s cost of borrowing fell slightly but the Italian Treasury only managed to sell EUR7.017 billion out of a maximum EUR8.5 billion, disappointing some market participants who had hoped for a repeat performance of yesterday’s super-successful short-term debt auction, where six-month borrowing costs were halved.

“If you look at a like-for-like comparison with the previous auction in November you get better yields, but it’s still expensive and they did not allot the full amount. So overall it’s a pretty bad auction, so that’s why the euro is falling,” said Chris Walker, currency strategist at UBS AG in London.

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December 29th, 2011

Gold futures fell to a five-month low in New York as extended gains in the dollar heightened speculation of slowing demand for precious metals.

The dollar climbed 0.4 percent against the euro after jumping 1 percent yesterday. Holdings (.GLDTONS) in bullion-backed exchange-traded products fell about 1.5 percent from a record on Dec. 14, data compiled by Bloomberg show. Gold is still up 7.8 percent this year, heading for an 11th consecutive advance.

“Yesterday and overnight the gold price traded lower as a reaction to the stronger U.S. dollar,” said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland. “The fundamental investment case for gold is still intact.”

Gold futures for February delivery declined 2 percent to $1,532.20 an ounce at 8:11 a.m. on the Comex in New York and earlier today dropped to $1,523.90, the lowest level since July 7. The metal for immediate delivery fell as much as 2.1 percent to $1,522.65 an ounce, the lowest since July 6.

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December 28th, 2011

Crude oil futures declined for the first time in seven days as a surge in the European Central Bank’s balance sheet to a record highlighted the growing risks of the region’s debt crisis.

Crude oil futures dropped as much as 2.2 percent after the ECB lent financial institutions more money last week in an attempt to keep credit flowing. The euro tumbled to the lowest level since January against the dollar, curbing investor demand for commodities. Oil also decreased on reduced concern that Iran will block the Strait of Hormuz.

“The biggest news right now is that the euro is coming in pretty strongly,” said Tom Bentz, a director with BNP Paribas Prime Brokerage Inc. in New York. “It was time for a correction after rising for six days.”

Crude oil futures for February delivery declined $1.72, or 1.7 percent, to $99.62 a barrel at 1:18 p.m. on the New York Mercantile Exchange. Earlier, prices touched $99.11 a barrel. Futures have climbed 9 percent this year, extending last year’s advance of 15 percent.

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December 28th, 2011

Silver futures tumbled to a three-month low, gold fell, capping the longest slump since October 2009 as Europe’s deepening debt crisis drove commodities and stocks lower.

The euro dropped to an 11-month low against the dollar as lending to financial institutions sent the European Central Bank’s balance sheet to a record high. The Standard & Poor’s GSCI index of 24 raw materials and the MSCI World Index of equities were poised for the biggest declines in two weeks. Platinum approached the lowest since November 2009, and palladium dropped almost 3 percent.

The ECB said lending to euro-area banks jumped 214 billion euros ($276.9 billion) to 879 billion in the week ended Dec. 23, bolstering credit to the economy during the fiscal turmoil. Gold has slumped 19 percent from a record $1,923.70 an ounce on Sept. 6, partly on sales to cover losses in other markets. About $10 trillion has been erased from global equities (MXWD) since May.

“What’s going on in Europe is very worrying,” James Dailey, who manages $215 million at TEAM Financial Management LLC in Harrisburg, Pennsylvania, said in an e-mail. “The dollar’s strength is working against all commodities, including gold.”

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December 28th, 2011

Gold futures prices slipped further away from the $1,600-an-ounce level Wednesday, headed for a fifth straight losing session, unable to get much support as buying interest was scarce in thin year-end trade.

The February gold futures contract (CNS:GC2G)  fell $30.60, or 1.9%, to $1,564.90 on the Comex division of the New York Mercantile Exchange.

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December 27th, 2011

Hedge funds reduced bets on higher commodity prices to the lowest level since 2009 just as raw materials headed for their biggest weekly rally in two months.

Money managers cut their combined net-long position across 18 U.S. futures and options by 15 percent to 454,512 contracts in the week ended Dec. 20, the lowest since March 2009, data from the Commodity Futures Trading Commission show. The Standard & Poor’s GSCI gauge of 24 commodities climbed 4.5 percent last week, erasing this year’s declines and pushing the index toward its third consecutive annual advance.

While the S&P GSCI is 15 percent below the 32-month high reached in April, prices gained last week on signs the U.S. economy is proving resilient. Durable-goods orders rose in November by the most in four months, and jobless claims unexpectedly fell to the lowest in more than three years. Concern that shortages will emerge in commodities from copper to crude oil spurred Goldman Sachs Group Inc. to stick with a bullish outlook this month even as funds cut their holdings.

“Commodities are in the process of bottoming,” said James Paulsen, the Minneapolis-based chief investment strategist at Wells Capital Management, which oversees about $340 billion of assets. “You’re going to find out that the U.S. economy is going to continue to grow much faster than people thought. You’re going to see people coming back to commodities.”

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