EIA: Energy commodity prices show mixed changes in 2013

Prices for West Texas Intermediate crude, natural gas, western coal, and electricity all averaged higher in 2013 than in 2012, while the price of North Sea Brent crude, various petroleum products, and eastern coal dropped, according to the US Energy Information Administration. Collectively, the energy component of the S&P Goldman Sachs Commodity Index (GSCI) ended the year close to its starting point.

While energy commodities displayed mixed price changes during 2013, prices of nonenergy commodities generally declined last year. The S&P GSCI Grains, Industrial Metals, and Precious Metals indexes ended 2013 down 17%, 20%, and 27%, respectively, from their starting points.

During second-half 2013, the positive correlation between crude oil futures prices and the price changes of other commodities diminished. This indicates that market-specific factors rather than systematic global economic growth are dominating commodity sector prices, EIA said.

Energy commodities

WTI and Brent account for 70% of the S&P GSCI Energy index, while products and gas make up the remaining 30%.

“The index was heavily influenced by the rise in crude prices during the initial supply disruptions in Libya in July and the uncertainty of military conflict in Syria in the last half of August,” EIA said, “However, as fall maintenance season began in the United States, pushing WTI inventories near record highs, and as geopolitical issues subsided, crude prices declined.”

On the products and gas side, heating oil prices rose this year because of strong global demand for distillate fuel and inventories near 5-year lows. Gasoline prices, however, declined as abundant supplies were produced as a result of the high refinery runs needed to satisfy demand for heating oil and diesel fuel.

US gas prices ended the year 50¢ to $1/MMbtu higher than their level at the start of the year, as a result of cold weather across much of the country.

Grains, metal commodities

Better-than-expected 2013 crop yields from favorable weather conditions pushed down corn prices and the S&P GSCI Grains index. The corn crop production reached almost 14 billion bushels, the highest recorded, according to the estimate of the US Department of Agriculture.

The S&P GSCI Industrial Metals Index encompasses mostly copper and aluminum, which account for 80% of the index. Copper prices declined in 2013 because of reduced demand in large commodity-consuming countries like China. Copper inventories, as tracked by the London Metal Exchange, increased from the beginning of 2013, exposing downward pressure on prices.

Due to the steep decline in gold prices in 2013, the S&P GSCI Precious Metals Index had the largest decline out of these four indexes last year.

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