Natural gas is best performing commodity in 2013Tuesday 31 December 2013 08.03
Natural gas is set to be the best performing commodity in 2013 with US oil also gaining, but gold is facing its biggest fall since 1981 as commodities end the year with all eyes on signs of a global economic pick-up.
Corn has suffered the most in 2013 with losses mounting to nearly 40% as record US production boosts global supplies, while major consumer China is cutting back on expected imports.
For 2014, investors in commodity markets are focusing on an improved economic outlook in top consumers the US and China, although increased supply may spoil the party, particularly for oil and copper.
US natural gas futures have climbed steeply amid fresh signs of chilly winter weather and stronger than usual seasonal demand with the front month contract up nearly 26% since the start of November.
If drawdowns for the rest of the heating season match the five-year average pace, it would result in the lowest end-winter inventory since 2008. That could help prop up prices next year as utilities scramble to rebuild stocks.
US oil prices are on track to end the year up 8%, recouping a 7% decline in 2012, but could come under pressure as the US shale oil boom curbs imports by the world's largest oil consumer.
Brent is set to end the year nearly flat in a year where supply disruption fears have offset concerns of weak demand.
Gold, which has lost 28% in 2013, is heading for its biggest annual decline since 1981 as investors ploughed money into equities, where the Dow Jones has jumped 26% and Japan's Nikkei index surged nearly 60%.
Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 40% in 2013 to their lowest level since 2009 as investors lost faith in bullion as a hedge against inflation, anticipating the US Federal Reserve's move to trim its commodity-friendly bond purchases.
Expectations of revived growth in China have pushed London copper to four-month highs, while aluminium is hovering near a two-month top.
But even though copper has gained almost 5% in December, the market is still down nearly 7% this year. Ample copper concentrate expected to flow into the market next year could cap gains fuelled by growth prospects.
In agricultural markets, US corn futures have fallen nearly 40%, the biggest annual slide on record, following a bumper global crop, including a rebound in US production.
Adding to corn's woes, China has rejected more than half a million tonnes of US corn - citing unapproved genetically modified strains - and has imposed strict checks as Beijing seeks to curb cheap imports and support domestic prices.