Natural-Gas Futures Near $3

Natural gas futures prices dropped to two-year lows, nearly breaching a major psychological threshold, as a series of government reports illustrated dismal demand for the fuel in the face of surging supply.

Natural gas for February delivery lost 9.4 cents, or 3%, to settle at $3.027 cents per million British thermal units on the New York Mercantile Exchange, the contract’s lowest settlement since September 2009.

Futures hit an intraday low of $3.001/MMBtu, bringing the front-month price within striking distance of $3, a level that also was last reached in September 2009.

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Shale Boom Heralds Fifth Year of Gas Declines

Natural gas has dropped 28 percent on the New York Mercantile Exchange this year, the most since 2006, as improved drilling technology and profits from selling gas liquids encouraged producers to pump record amounts of the fuel from shale formations from Texas to Pennsylvania. Futures have dropped in each of the past three years, the longest stretch of declines since the contracts began trading on the Nymex in 1991.

Slowing demand from households, factories and power plants are poised to send prices down for an unprecedented fifth year in 2012.

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Shale’s Bounty Goes Beyond Oil and Gas

Processing ethane into chemicals is 50% cheaper than using crude oil-derived naptha and its availability has made U.S. petrochemical companies the envy of overseas competitors. It also brings the prospect of lower prices for auto parts, Styrofoam and other products.

The U.S. shale-oil and natural-gas boom has cracked open another lucrative market—gas liquids used to make plastics.

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Investors ‘looking for safety’ send commodities slumping

The fall in key industrial raw materials such as oil and copper signals a belief that economic expansion will be slower than expected, while the pullback in gold and stocks speaks to a desire to shed risky assets. After months of stomach-churning volatility, buyers are indicating a new hunger for stability.

Investors are running away from risk as fears grow that the global recovery is slowing to a crawl.

Gold, copper and oil prices plunged Wednesday, along with global stocks, as worries over Europe’s crippled economy pushed investors to seek a haven in U.S. currency and Treasuries.

via Investors ‘looking for safety’ send commodities slumping – The Globe and Mail.

Natural gas prices hit 10-year low

Natural gas prices in Alberta fell to 10-year lows this week, increasing pressure on an industry already struggling in an oversupplied continental market.
The outlook for 2012 remains bleak as record high inventories in Canada and the United States emphasize the need to expand outlets for the abundant resource, and fast forward liquefied natural gas projects, said analysts.

Prices at the benchmark AECO storage hub in southern Alberta averaged $2.93 per gigajoule Monday, the lowest price since 2001 for the same period, according to Internet natural gas exchange NGX.

Cloud ‘cannibalises’ IT service procurement

The continuing trend to outsource key services to cloud-based third party providers is radically disrupting established IT procurement practices, according to new research.

“The continued trends toward consumerisation and cloud computing highlight the movement of certain former IT responsibilities into the hands of others,” said Daryl Plummer, managing vice president and Gartner fellow.

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Should Homeland Security control the electrical grid? Maybe

The electrical grid is commonly cited as a potential security issue for the U.S. and in a wide-ranging study on the matter, researchers at the Massachusetts Institute of Technology say that the time has come for the U.S. government to focus a single agency’s efforts on doing a better job of securing it.

The issue, MIT‘s researchers say, is that the many stakeholders involved in maintaining the U.S. electrical grid aren’t working together, even though “cybersecurity regulations for bulk power systems already exist in the form of the NERC Critical Infrastructure Protection reliability standards.” For one, the researchers point out, those standards only apply to “the bulk power system and does not include the distribution system.” Distribution utilities on the local level are operating outside current regulations, making managing the entire grid practically impossible, the researchers added.

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ISM Index of U.S. Manufacturing Increases

U.S. manufacturing expanded in November at the fastest pace in five months, buttressing other reports this week that signal the economy is picking up as 2011 comes to an end.

The Institute for Supply Management’s factory index increased to 52.7 last month from 50.8 in October, the Tempe, Arizona-based group said today. Readings above 50 indicate expansion, and economists surveyed by Bloomberg News projected a gain to 51.8. Construction spending climbed for a third month in October and jobless claims increased, other data showed.

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Record Cotton Crop Spurs Goldman to Predict Declining Prices: Commodities

Cotton prices may decline 15 percent to 77 cents a pound on ICE Futures U.S. in New York by the end of next year, from 90.91 cents now, based on the median of 12 analyst estimates compiled by Bloomberg.

The combination of a record cotton crop and falling consumption will expand global stockpiles by the most since 2005, driving further declines in the price of this year’s worst-performing commodity.

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