Natural Gas at a Historically Low Price Relative to Oil – NYTimes.com

CRUDE oil prices have risen this year, and this week they briefly touched $100 a barrel for the first time since 2008.

But not everyone felt the pinch. While gasoline prices were rising in the United States, the cost of heating most homes was actually falling a bit. Natural gas prices are well below their levels at the end of 2010.

As the accompanying charts show, natural gas fell to a historical low relative to oil this week. The price of natural gas is now less than one-quarter that of oil on an energy-equivalent basis.

via Natural Gas at a Historically Low Price Relative to Oil – NYTimes.com.

Higher Grain Prices Start Pinching Consumers; USDA Expects Food Prices to Jump – WSJ.com

The surge in grain prices that has been stoking food inflation for months in much of the world is beginning to seep into U.S. supermarkets and restaurants.

U.S. food prices will jump between 3% and 4% this year, the U.S. Agriculture Department forecast Thursday, after rising in 2010 by the slowest rate since 1962.

The cost of processing food is soaring in part because foreign demand for U.S. agricultural commodities is surging at the same time the rising price of gasoline is stimulating the biofuel industry's appetite for corn to make ethanol.

Prices of corn, wheat and soybeans—crops that are ubiquitous in U.S. food products—are up 88%, 76% and 37%, respectively, from 12 months ago. The soaring cost of fattening livestock with grain is also helping to lift prices of hogs and cattle to record-high levels. On top of all that, rising oil prices are lifting costs of packaging and transportation.

The USDA raised its 2011 food-inflation forecast Thursday from the 2% to 3% range it had been projecting since July. The government's consumer-price index for all food rose 0.8% in 2010. A change of one percentage point in the food-inflation rate is equal to about $12 billion in annual spending.

via Higher Grain Prices Start Pinching Consumers; USDA Expects Food Prices to Jump – WSJ.com.

The U.S.s Irrational Oil Addiction – DailyFinance

One solution is natural gas. Abundant, domestic, price-competitive, clean — natural gas has many advantages over oil.

Abundance is perhaps at the top of the list. The Potential Gas Committee PGC estimates that the U.S. has 1,451 trillion cubic feet Tcf of recoverable natural gas, out of a total natural gas resource base of 2,119 Tcf. Thats good for about a 100-year supply less if natural gas consumption increases. Also, of the 22.8 Tcf of natural gas the U.S. consumed in 2009, 90% was produced in the U.S.

via The U.S.s Irrational Oil Addiction – DailyFinance.

The Stealth Return of $100 Oil – WSJ.com

Gasoline prices averaged $3.14 a gallon in the U.S. last week, according to the U.S. Energy Information Administration, up 2.9% from Dec. 27. In February 2008, when oil prices settled in triple digits for the first time in history, retail gasoline prices in the U.S. were at $3.13 a gallon.

While U.S. prices haven’t scaled such heights—the benchmark oil contract on the New York Mercantile Exchange briefly surged Tuesday past $94—many U.S. oil refiners and consumers are finding their costs have already escalated. Refiners such as Valero Energy Corp. are paying prices that mostly track Brent, not the U.S. benchmark often referred to as West Texas Intermediate, and those costs are being passed on to gas stations.

The split between U.S. WTI prices and prices throughout the energy chain is unusual because typically WTI and Brent are within about $1 of each other. But in recent weeks the two have veered wildly, taking that gap to more than $19 last week—the widest on record.

Brent on Monday settled at $105.74, a two-year high, driven by increasing unrest in the Middle East. It surged to as high as $108.70 a barrel after the close on worries that the turmoil in Libya was curtailing output of that country’s sought-after oil. In the U.S. prices have been kept relatively in check by a glut of oil in the country’s main storage facility in Cushing, Okla. While the price of Brent has risen 12% this year, the WTI benchmark was down 5.7% through Friday. Nymex was closed Monday for Presidents Day.

via The Stealth Return of $100 Oil – WSJ.com.

Farmers Fail to Meet Demand as Corn Stockpiles Drop to 1974 Low – Bloomberg.com

The smallest corn inventories in 37 years are a sign farmers around the globe are failing to produce enough grain to meet rising consumption, even as planting expands and food prices surge.

Growers from Canada to Russia boosted annual output of wheat, rice and feed grain by 16 percent since 2000, not enough to keep up with the 20 percent gain in demand, U.S. Department of Agriculture data show. While a Bloomberg survey of 25 analysts shows the agency on Feb. 24 may forecast a 3.5 percent increase in U.S. corn planting, the government says world stockpiles will equal 15 percent of use, the lowest since 1974.

via Farmers Fail to Meet Demand as Corn Stockpiles Drop to 1974 Low – Bloomberg.com.

Libya Unrest Pushes Up Oil Prices – WSJ.com

Crude-oil futures soared Monday, as violent clashes between protesters and government forces in Libya revived fears that escalating demonstrations would disrupt the region’s oil exports.

The front-month April Brent contract on London’s ICE futures exchange was recently up $1.95, or 1.9%, at $104.47 a barrel, having hit a two-year high of $105.08 earlier. The front-month March contract on the New York Mercantile Exchange was up $3.33, or 3.9%, at $89.53 a barrel, its highest since Feb. 4.

Antigovernment protests have spread throughout Libya’s major cities, including the capital Tripoli. With violence worsening, several oil companies, including BP PLC, are pulling personnel from the country. Around 50,000 barrels a day of production has been shut down, according to the International Energy Agency.

The IEA is on “high alert” for potential supply disruptions, David Fyfe, head of the IEA’s Oil Industry and Markets Division, said at a conference in London.

via Libya Unrest Pushes Up Oil Prices – WSJ.com.

The trend in clothing prices: High cotton

The cost of your tighty-whities is going up. Same goes for your socks, dresses, shirts, jeans and other clothing.

Thanks to the higher cost of cotton and other materials, as well as higher labor costs, clothing prices are expected to increase this year – as much as 30 percent or more, according to companies and experts.

Cotton is one of the biggest factors; its prices have skyrocketed to records, more than doubling from a year ago.

“What we have this year is record prices, triple or double prices from last year depending on the quality of the cotton,” said Andrei Guitchounts, an economist with the International Cotton Advisory Committee.

Other materials have also risen roughly 50 percent in cost as companies turn to synthetics to replace some of their cotton supplies with blends and alternatives.

via The trend in clothing prices: High cotton.

Silver Nears 31-Year High – WSJ.com

Silver prices neared 31-year highs on a brightening outlook for the global economy and as inflation concerns have revived.

Silver for February delivery rose 72.6 cents, or 2.3%, to settle at $32.2980 a troy ounce on the Comex division of the New York Mercantile Exchange. It was the metal’s strongest close since March 1980.

via Silver Nears 31-Year High – WSJ.com.

Supply constraints propel spot ethylene prices in USA to three-month highs

Spot ethylene prices in USA peaked to a three month highs, with February volumes heard done at the 52- and 53-cent/lb levels, as per Platts. These levels were previously seen on November 10, 2010, while February spot ethylene was last assessed Tuesday at 49.125 cents/lb.

Ethylene has been on a steady climb since February 8, when a major feedstock supplier Enterprise Products Partners declared force majeure out of the facility out of its Mont Belvieu, Texas unit after a massive fire at a key storage facility. Supporting ethylene’s surge were strong ethane values, which reached the 76-cent/gallon level in Tuesday morning trading before scaling back in the afternoon and into Wednesday. A downed olefins unit at LyondellBasell's complex in La Porte, Texas, and ExxonMobil's move to put certain high-density polyethylene products out of its Mont Belvieu, Texas, plant on allocation, were also having an effect on prices.

via Supply constraints propel spot ethylene prices in USA to three-month highs.

EU STEEL PRICES SOAR IN FEBRUARY – MEPS

EU Average Hot Rolled Coil transaction price soared by almost €100 per tonne in February. Buyers are anticipating further increases in domestic values of flat products in the second quarter as steelmakers make large upward adjustments, in line with higher raw material costs.

The EU mills are currently busy because of the restocking exercise that started in December ahead of price rises.

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