My first post of this beautifully snowy 2017 brings good news from Today in Energy published this morning by the U.S. Energy Information Administration ("EIA") – "energy commodity prices rose more than other commodity sectors in 2016."
Like the crisp cold air of a snowy winter's morning, energy commodity prices seeing large percentage increases is a great way to start the new year.
"The spot energy index in the S&P Goldman Sachs Commodity Index ("GSCI") rose 48% since the start of 2016" – reportedly growing more than any other commodity group.
- What were the leading energy commodity prices?
According to ESI: Among individual commodities, zinc, natural gas, crude oil, and diesel saw larger percentage increases than all other commodities in the S&P GSCI.
- Cause of the gains?
Numerous factors attributed to energy commodity prices raising so much. Today in Energy attributes the cause as follows: Commodity price movements were influenced by global economic growth as well as by commodity-specific supply-side factors in 2016.
- Did the increase in oil prices toward the end of 2016 contribute?
Yes! Oil prices are reportedly responsible for the overall increase as "the energy index tends to follow major price movements in the crude oil market." Brent and WTI Crude, the crude oil benchmarks, reportedly accounted for 69% of the weighting in the S&P GSCI energy index. The EIA reports crude oil prices were supported by a number of factors – not only the OPEC deal to cut crude production, but also "improved economic growth in both developed and emerging markets" reportedly helped boost the gains, as did the slowing of global liquid fuels inventory growth.
- Notes on my other favorites – precious metals and cattle:
There was news on our favorite precious metals increasing too...Today in Energy reports, "The S&P GSCI precious metals index, composed of gold and silver, increased in the first half of 2016 but gradually declined in the second half of the year."
And on a final note, although it is common knowledge, the Wyoming in me has to talk about the low cattle prices. Cattle commodities reportedly "declined to a seven-year low in October 2016."
Grateful for the snow and the good news showing that energy commodity prices took the lead!
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