Latest news with #NYMEX
Fibre2Fashion
28-05-2025
- Business
- Fibre2Fashion
ICE cotton falls on strong dollar, weak crude oil
ICE cotton futures declined on Tuesday, pressured by a stronger US dollar and weakening crude oil prices. A stronger dollar makes US cotton more expensive for overseas buyers, reducing demand, while cheaper crude oil lowers polyester prices, intensifying competition with cotton. Bearish sentiment in the broader agricultural commodity sector further weighed on US cotton. The ICE cotton July 2025 contract settled at 65.57 cents per pound (0.453 kg), down 0.54 cent from the previous day. The December 2025 contract settled at 68.32 cents, down 31 points. Other contracts also closed lower, with losses ranging between 7 and 41 points. ICE cotton futures fell on Tuesday as a stronger US dollar and declining crude oil prices pressured demand. A firm dollar made US cotton less affordable for global buyers, while cheaper crude reduced polyester costs, increasing competition. Bearish sentiment in commodities, rising speculative short positions, and lack of strong catalysts are keeping prices range-bound between 64.50â€'67.50 cents. The US dollar strengthened following improved consumer confidence data, making dollar-denominated cotton costlier for international buyers and dampening global demand. NYMEX crude oil futures declined amid growing expectations that OPEC+ may increase production in its upcoming meeting, raising concerns of oversupply. Additionally, ongoing US-Iran negotiations added to crude market weakness, which indirectly pressured cotton as cheaper crude reduces polyester production costs, making it a more attractive substitute. Daily trading volume rose significantly to 43,064 contracts, well above last week's average of 32,311 contracts. Friday's session (May 24) cleared 36,663 contracts. The July contract touched an intraday high of 66.79 cents, briefly buoyed by improved sentiment after US President Trump announced a delay in implementing a 50 per cent tariff on EU imports until July 9. The European Union reported that a weekend phone call between President Trump and EC President Ursula von der Leyen had provided 'new impetus' to trade talks, offering mild support to risk assets, including cotton. In related markets, CBOT wheat futures fell for the third consecutive day due to beneficial rainfall across key growing regions, which improved crop moisture and boosted production expectations. Corn closed flat, while soybeans posted slight gains. The US Commodity Futures Trading Commission (CFTC) report for the week ending May 20 revealed that speculators increased their net short positions in ICE cotton futures and options by 9,833 contracts, bringing the total net short to 57,136 contracts. Technical resistance for the July 2025 contract is seen at 67.50 cents, with key support around 64.50 cents. Analysts expect sideways trading between these levels unless a major catalyst—such as a tariff resolution or significant supply-demand development—emerges. Market analysts noted that, without a close above 67.50 cents or fresh news, the market is likely to remain range-bound between 64.50–67.50 cents. Overall, ICE cotton remains under macroeconomic pressure with limited upside triggers, as traders closely monitor currency movements, energy markets, global demand signals, and geopolitical developments that could affect trade flows. Currently, ICE cotton for July 2025 is trading at 65.32 cents per pound (down 0.24 cent), cash cotton at 63.82 cents (down 0.54 cent), the October 2025 contract at 68.02 cents (down 0.41 cent), the December 2025 contract at 68.08 cents (down 0.24 cent), the March 2026 contract at 69.64 cents per pound (down 0.17 cent), and the May 2026 contract at 70.74 cents (down 0.14 cent). A few contracts remained at their previous closing levels, with no trading recorded today. Fibre2Fashion News Desk (KUL)
Yahoo
22-05-2025
- Business
- Yahoo
Gasoline ETF in Focus Ahead of Memorial Day Travel
As Memorial Day weekend approaches, American drivers are experiencing a welcome reprieve at the gas station. Gasoline prices are projected to be among the lowest in recent decades for the holiday, providing both consumers and investors reasons to to an analysis by GasBuddy, the average gallon of gas this Memorial Day weekend is expected to be around $3.08, down from $3.58 a year ago. This marks the cheapest rate at the gas station since 2021 and brings the pure-play United States Gasoline ETF UGA, which allows investors to make a direct play on the commodity of RBOB gasoline, in focus. Lower gasoline prices are encouraging more Americans to travel during the holiday weekend. AAA projects that 45.1 million people will travel at least 50 miles from home, setting a new record for Memorial Day weekend travel. Of these travelers, approximately 87% will be driving, taking advantage of the more affordable fuel increased travel activity is expected to boost consumer spending in various sectors, including hospitality, dining, and retail, as travelers allocate savings from fuel costs to other expenses (read: 4 Leisure ETFs Poised to Gain From U.S. Summer Travel Revival).While gasoline prices are lower currently, high travel demand during the Memorial Day weekend could lead to increased consumption, potentially influencing gasoline futures and UGA's performance. United States Gasoline ETF is designed to track the movements of gasoline prices in percentage terms. The benchmark futures contract is the contract on gasoline as traded on the NYMEX. If the near-month contract is within two weeks of expiration, the benchmark will be the next-month contract to expire. United States Gasoline ETF is illiquid, with a daily trading volume of about 16,000, suggesting that investors have to pay beyond the annual fee of 1.17% per year. The fund has managed assets of $72.7 million (see: all the Energy ETFs).As traders need to roll from one futures contract to another, the fund is susceptible to roll yield. Notably, roll yield is positive when the futures market is in backwardation and negative when the futures market is in contango. Basically, if the price of the near-month contract is higher than the next-month futures contract, then it is backwardation, and the opposite holds true in contango. United States Gasoline ETF is poised to benefit from the prolonged period of backwardation, where later-dated contracts are cheaper than near-term contracts. Currently, the gasoline market is in backwardation, which is favorable for the commodity and the gasoline ETF UGA. As such, the fund continues to roll over next-month futures contracts at a lower price, thereby making profits. This signals continued bullishness in the commodity. This trend is likely to persist at least in the near term, acting as the biggest catalyst for the commodity. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report This article originally published on Zacks Investment Research ( Zacks Investment Research
Globe and Mail
21-05-2025
- Business
- Globe and Mail
Will Natural Gas Prices Remain Elevated Throughout 2025?
In my April 15, 2025, Q1 Barchart article on the energy sector, I highlighted that ' natural gas was a double-digit percentage winner as inventories across the United States fell below the previous year's and the five-year average.' Nearby NYMEX natural gas futures moved 13.38% higher in Q1, settling at the end of March 2025 at $4.1190 per MMBtu. On April 15, I wrote: Natural gas is now in the shoulder season where heating and cooling demand are absent, but at around the $3.50 level, U.S. natural gas futures prices reflect low inventories. Meanwhile, the latest April 4 Baker Hughes natural gas rig report showed 96 rigs operating, 14 below the level at the same time in 2024. In April 2024, the nearby natural gas futures price was $2.14 per MMBtu at the month's high. Natural gas has declined from the Q1 closing price in April, but the price remains elevated as low inventories and increasing demand for U.S. LNG are not bearish. However, seasonality suggests that natural gas has some downside as the price is over $1.25 per MMBtu higher than at the same time in April 2024. Prices have not changed much in May 2025 as the cooling season approaches. Natural gas prices are steady above the $3.50 level U.S. natural gas futures for June delivery reached a $5.073 per MMBtu high on March 10, 2025. While prices have moved lower, they remain around the $3.50 level on May 6. The daily chart of NYMEX natural gas for June 2025 delivery shows that the energy commodity fell 40.7% to a $3.007 low on April 24, 2024. Since the late April low, natural gas futures have made higher lows and higher highs, reaching $3.840 on May 12 and trading around the $3.65 level after falling from the most recent high. A bullish trend since the 2024 low In February 2024, the continuous natural gas futures contract found a bottom at $1.60 per MMBtu. The price has more than doubled since early 2024. The chart shows the bullish trend over the past seventeen months. At the $3.65 level on May 12, 2025, natural gas futures are over $1.00 per MMBtu higher than the price in May 2024. The bullish case for natural gas While the trend is always a trader or investor's best friend and it remains bullish in the U.S. natural gas futures arena in May 2025, inventories have supported prices. While U.S. natural gas stockpiles across the United States at 2.145 trillion cubic feet are only 1.4% above the five-year average as of the week ending on May 2, 2025, they are a substantial 16.1% lower than the level in late April 2024. Increasing demand for U.S. LNG and high demand over the past winter season have pushed prices higher. Natural gas inventories reached a 1.698 trillion cubic feet low at the end of the 2024/2025 withdrawal season, the lowest level since 2022. Natural gas moves into the shoulder season from March through June when heating and cooling demand decline. As the market moves towards summer and temperatures rise, power generation requiring natural gas to power air-conditioning will increase the energy commodity's demand. Meanwhile, as of May 9, Baker Hughes reported that 101 natural gas rigs were operating, only one less than the same time in 2024. Buying dips could be optimal Natural gas is a very volatile commodity. The continuous contract prices have traded as high as $9.987 and as low as $1.60 per MMBtu since August 2022. While the current price is more than double the low, it is nearly one-third the level at the high. The inventories, rig count, increased LNG demand, and price action during the slow shoulder season point to higher natural gas prices over the coming months. The peak demand season, when prices tend to reach annual highs, occurs in late Q3 and Q4. Given the bullish price trend, buying dips with tight stops could be optimal for natural gas over the coming weeks and months. BOIL is the bullish leveraged natural gas ETF product- Use price and time stops The most direct routes for a risk position in natural gas are through the CME's NYMEX division, U.S. Henry Hub natural gas futures, and futures options. The UNG unleveraged ETF product tracks NYMEX natural gas futures on a short-term basis. The Bloomberg Ultra Natural Gas 2X ETF product (BOIL) provides leverage to short-term U.S. natural gas prices. At $65.88 per share, BOIL had over $217.1 million in assets under management. BOIL trades an average of over 2.327 million shares daily and charges a 0.95% management fee. BOIL's leverage requires market participants to use time, and price stops as time decay can destroy the leveraged ETF's value if natural gas prices move lower or remain stable. On the upside, BOIL will provide a leveraged return. The most recent rally in June NYMEX natural gas futures took the price 27.7% higher from $3.007 on April 24 to $3.840 per MMBtu on May 12. The daily chart shows BOIL's 55.1% rise from $45.39 to $70.40 per share over the same period, as the leveraged ETF delivered twice the percentage gain as the June NYMEX futures. I favor buying BOIL on price weakness in the NYMEX natural gas futures arena over the coming weeks and months. However, the leverage requires price, and time stops to protect capital. One of BOIL's drawbacks is that while the natural gas futures market operates around the clock, BOIL is only available during U.S. stock market hours, so the ETF can miss highs or lows occurring during off-stock market hours.
Yahoo
15-05-2025
- Business
- Yahoo
Risk management for fuel resellers and end users
Because the wholesale fuel markets can change rapidly with political, weather, and trading events, businesses and organizations using large amounts of fuel need to address marketplace risks around pricing and fuel supply. Shipley Energy provides the following risk mitigation strategies businesses can put into place to better tolerate risk. Fuel prices are subject to significant fluctuations due to but not limited to geopolitical events, high frequency algorithmic trading, supply chain disruptions, OPEC decisions, and natural disasters. Fuel resellers risk margin compression when prices rise rapidly, while end users may face higher operational costs. Higher fuel prices may put stress on your credit lines, cash flow, or customer demand. A backwardated market may negatively affect your inventory valuations or put strain on supply availability Fuel resellers have a natural hedge to gradual price fluctuations—they buy fuel, mark it up, and resell it. The risk lies in the holding period (when you buy versus when you sell) and the volatility (how fast the market moves). To reduce these risks, you can: Shorten your holding period through better inventory management. For example, don't hold 50,000 gallons in storage if you only sell 10,000 gallons per week. Purchase what you sell. If you provide a price cap program to your customers, where they can lock in a ceiling price and receive a lower price if the market drops, make sure you're using the right market structure to do so. For instance, do not back a price cap program sale with a standard fixed priced fuel purchase. In this case, if you hedge a fixed price and the market goes below it, you'll be stuck with higher-priced product. Layer in your purchases for a weighted average cost of goods. This strategy works especially well for heating oil and propane. Protect your basis. As we have experienced in recent years, local (rack and pipeline) price basis can be exponentially more volatile than NYMEX futures. If you only hedge NYMEX futures, you are still exposed to rack and pipeline basis volatility. Fuel end users do not have a natural hedge. They are exposed to a rising price fuel market, which may increase their operational costs. Add a variable fuel surcharge that gets passed along to your customers based on the cost of diesel. If you cannot pass on a variable fuel surcharge to your customers, consider locking in a fixed price or a CAP price for your fuel. This takes the guess work out of your fuel budget. You can now price your product/service based on a guaranteed cost of fuel. Refinery shutdowns, pipeline failures, transportation strikes, cyber-attacks, or weather events can halt the delivery of fuel. Even short periods of pipeline delays or temporary gaps in transportation can disrupt fuel availability. Fuel shortages may impact your ability to meet customer demand, damage your company's reputation, and negatively affect your profitability. Supplier Diversification: Establish relationships with multiple suppliers to ensure redundancy or work with a wholesaler that has established relationships. Partnering with suppliers that have redundancy built into their own business adds a second layer of security. Inventory Management: Maintain strategic reserves of fuel to buffer against short-term supply disruptions. If you do not have enough storage for 10 days of demand (one pipeline cycle), make sure that your supplier has storage space at your local fuel terminal. Transportation: Develop partnerships with reputable logistics companies that have redundancies built into their business models. This story was produced by Shipley Energy and reviewed and distributed by Stacker. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
15-05-2025
- Business
- Miami Herald
Risk management for fuel resellers and end users
Because the wholesale fuel markets can change rapidly with political, weather, and trading events, businesses and organizations using large amounts of fuel need to address marketplace risks around pricing and fuel supply. Shipley Energy provides the following risk mitigation strategies businesses can put into place to better tolerate risk. Market and price volatility risks Fuel prices are subject to significant fluctuations due to but not limited to geopolitical events, high frequency algorithmic trading, supply chain disruptions, OPEC decisions, and natural resellers risk margin compression when prices rise rapidly, while end users may face higher operational fuel prices may put stress on your credit lines, cash flow, or customer demand.A backwardated market may negatively affect your inventory valuations or put strain on supply availability Fuel resellers have a natural hedge to gradual price fluctuations-they buy fuel, mark it up, and resell it. The risk lies in the holding period (when you buy versus when you sell) and the volatility (how fast the market moves). To reduce these risks, you can: Shorten your holding period through better inventory management. For example, don't hold 50,000 gallons in storage if you only sell 10,000 gallons per what you sell. If you provide a price cap program to your customers, where they can lock in a ceiling price and receive a lower price if the market drops, make sure you're using the right market structure to do so. For instance, do not back a price cap program sale with a standard fixed priced fuel purchase. In this case, if you hedge a fixed price and the market goes below it, you'll be stuck with higher-priced in your purchases for a weighted average cost of goods. This strategy works especially well for heating oil and your basis. As we have experienced in recent years, local (rack and pipeline) price basis can be exponentially more volatile than NYMEX futures. If you only hedge NYMEX futures, you are still exposed to rack and pipeline basis volatility. Fuel end users do not have a natural hedge. They are exposed to a rising price fuel market, which may increase their operational costs. Add a variable fuel surcharge that gets passed along to your customers based on the cost of you cannot pass on a variable fuel surcharge to your customers, consider locking in a fixed price or a CAP price for your fuel. This takes the guess work out of your fuel budget. You can now price your product/service based on a guaranteed cost of fuel. Supply chain risks Refinery shutdowns, pipeline failures, transportation strikes, cyber-attacks, or weather events can halt the delivery of short periods of pipeline delays or temporary gaps in transportation can disrupt fuel shortages may impact your ability to meet customer demand, damage your company's reputation, and negatively affect your profitability. Supplier Diversification: Establish relationships with multiple suppliers to ensure redundancy or work with a wholesaler that has established with suppliers that have redundancy built into their own business adds a second layer of security. Inventory Management: Maintain strategic reserves of fuel to buffer against short-term supply you do not have enough storage for 10 days of demand (one pipeline cycle), make sure that your supplier has storage space at your local fuel terminal. Transportation: Develop partnerships with reputable logistics companies that have redundancies built into their business models. This story was produced by Shipley Energy and reviewed and distributed by Stacker. © Stacker Media, LLC.
