Weekly Energy Roundup: Crude Surges, Natural Gas Continues Slide (UNG, USO, USL, UGA, BNO)

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November 11, 2011 12:24pm NYSE:BNO NYSE:UGA

Michael Johnston: Energy prices managed to squeeze out relatively strong performances over the last week despite the chaos in Italy that rippled throughout the global financial markets. Crude oil resisted the downward pressure from intensifying anxiety over a debt crisis in Europe, and managed to head

higher in recent sessions–with a brief detour on Wednesday.

The following table shows the performance of energy exchange-traded products for the week ended November 10; note that these products utilize futures-based strategies, and as such may not reflect changes in spot commodity prices over this period:

Ticker ETF Weekly Change*
USO United States Oil Fund +3.9%
USL United States 12 Month Oil Fund +3.6%
CRUD Teurcium Crude Oil Fund +3.0%
UNG United States Natural Gas Fund -3.9%
UNL United States 12 Month Natural Gas Fund -3.8%
NAGS Teucrium Natural Gas Fund -4.7%
UGA United States Gasoline Fund -0.5%
BNO United States Brent Oil Fund +2.3%
UHN United States Heating Oil Fund +3.1%
*Week ended November 10

In Tuesday trading energy markets got a boost from news out of Europe that Italy’s prime minister will soon step aside, which was interpreted as a step in the right direction for a country facing a massive debt burden. But those gains were short-lived, as Wednesday trading brought a huge drop in global equity markets that hammered energy commodities as well. Oil fared much better than other risky assets on the day, dropping by only about 1% on the day.

Natural gas prices slipped after a disappointing storage report on Thursday, and lagged far behind oil prices during the last week. Natural gas was about 7% behind crude over the last week, the latest illustration of the diverging fortunes for these energy commodities.

Middle East In Focus

Also influencing oil and gas prices in the last several days was a report from the U.S. Energy Department predicting that crude oil prices will climb by 1.6% in 2011 despite a dip in global demand. “Oil prices continue to face upward price pressure because of supply  uncertainty resulting from ongoing unrest in the oil- producing regions  of the Middle East and North Africa,” the department said in the report.  “However, there may be downward price pressure if Libya is able to ramp  up oil production and exports sooner than anticipated.”

While analysts raised expectations for an increase in production from Libya, developments in Iran helped to fuel uncertainty. The U.N.’s nuclear agency said formally for the first time this week that Iran is developing technologies used in the production of nuclear weapons. Fears of an uptick in geopolitical tensions in there placed additional upward pressure on oil prices; further isolation and potential military action against Iran could cause a spike in gas prices in the future.

Related: United States Natural Gas (NYSEARCA: UNG), United States Oil (NYSEARCA: USO), United States 12 Month Oil (NYSEARCA: USL), United States Gasoline (NYSEARCA: UGA), United States Brent Oil (NYSEARCA: BNO).

Written By Michael Johnston From CommodityHQ

CommodityHQ offers educational content, analysis, and commentary on  global commodity markets. Whether you’re looking to speculate on a  short-term jump in crude or establish a long-term allocation to natural  resources, CommodityHQ has the information you need.

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