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Three Commodities Looking to Turn It Around in 2013


Natural gas, crude oil, and cotton have turned in positive performances during the first half of this year.

The first half of 2013 is officially in the books as commodity investors take a look back on a relatively eventful two quarters. While equities surged to highs never seen before, a number of commodities struggled, as analysts and investors fear that the super-cycle may be nearing its end. But while a number of high-profile commodities, like gold, had a tough time this year, there were others that persisted. Below, our firm outlines three commodities who turned in positive performances through the first six months of the year.

Natural Gas Turns It Around

Through the first half of 2012, natural gas had been struggling, losing approximately 28%. But this year has been a different story for the fossil fuel as the commodity actually logged a gain of 3.9% at the end of June. While this jump certainly has not kept pace with the market, it is a welcome change for the assets that have been fighting to establish positive momentum for several years now. At one point in the year, NG was up nearly 30%, but abnormal weather patterns put a pinch in demand and saw prices take a tumble in the last few weeks.

Crude Oil Holding High

The first half of 2012 saw crude oil take a loss of 16.5%, as the commodity found itself entering a temporary slide. While 2013 has not seen oil make any major strides higher, it finished out the first six months of the year 2.4% higher, even with all of the increased supply from technological advancements around the world. A big key for this fossil fuel moving forward will be the Keystone Pipeline, as this project looks to open up new infrastructure in the US that could be a game-changer for the energy space. The pipeline expansion, of course, comes hotly contested and its future remains murky at best.

Cotton Softens the Blow

The first six months of 2012 saw cotton prices dip by nearly 18% as it came down off of 2011 highs. This year has seen a handsome turnaround, as the commodity has enjoyed a 10% boost as these first six months have been kind to the commodity. It should be noted that cotton's five-year seasonal trend suggests that it will struggle through November, where it makes its final major low of the year. Those who have enjoyed the gains that cotton has brought thus far in 2013 may want to think about taking profits and moving onto a new position.

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Editor's note: This article by Jared Cummans was originally published on Commodity HQ.
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