Ocean acidification may disrupt the marine nitrogen cycle – Ocean acidification, the result of roughly a third of global CO2 emissions dissolving into the seawater and lowering its pH, has complicated and poorly understood consequences for ocean ecosystems. Scientists already know that a drop in ocean pH affects the carbon cycle, reducing the carbonate ions that organisms like corals, mollusks and crustaceans use to build shells and external skeletons. Now, a new study shows that a CO2-induced increase in acidity also appears to disrupt the marine nitrogen cycle. The finding, to be published December 21 in the Proceedings of the National Academy of Sciences, could have ramifications for the entire ocean food web. The authors of the study examined a specific step in the marine nitrogen cycle, called nitrification, in which microorganisms convert one form of nitrogen, ammonium, into nitrate, a form plants and other marine microorganisms require to survive.
Old, high grain prices near – Grains are all approaching their recent highs. Wheat, corn, and soybeans are within striking distance of the two-year highs made for all three crops. Grains have some great examples in the commodities of just how volatile things can be, as sugar, cotton, and coffee all are giving the grains a sign of the type of strength that commodities can get when people are short supplies. Coffee prices ran to new highs today, running above their recent highs and now at all-time highs for coffee prices, well above 2008 price levels. Cotton has rallied to new highs as well, impressive after a huge price dip of about 20% from the highs made in November. Since then, cotton prices have rallied back to new highs, above the November highs, and the volatility seems to be accelerating (limit up Tuesday and limit down Wednesdday). These are indeed interesting times, especially when one realizes that cotton competes with corn, soybeans, and wheat acreage in the cotton belt. Surely there will be more cotton acres in 2011, and that will come at the expense of the other 3 major crops when they have no room to give up acreage. That makes for some interesting times as we go into spring – with the battle for acreage heating up between the big 4 crops.
Oil prices climb again today to over $91 – The national average for a gallon of regular gasoline topped $3 on Thursday. It’s the first time that the average retail price has been above $3 a gallon at Christmas. The average pump price rose about a cent and a half a gallon overnight, to $3.01, according to AAA, Wright Express and Oil Price Information Service. That’s 14 cents more than a month ago and 43 cents higher than a year ago. Pump prices have traditionally dropped after the peak summer driving season and into the winter, because fewer people are on the road.
Crude oil at $250 per barrel? – Last month Mr Alexei Miller, CEO of Russia’s and world’s largest gas company OAO Gazpron predicted that the oil price would shoot up to $250 per barrel in the near future and the gas prices will follow similar upward trend. The new Russian President Dmitry Medvedev also commented, in a manner gentler than his predecessor’s but quite clearly, that the world has to get adjusted to the new reality of stronger Russian and weaker US economic power in view of high oil and gas prices. Let us contemplate the scenario in which oil price does rise to $250 per barrel and stays there for an extended period. It would lead to a major global economic recession and possibly a depression. In the US, gasoline prices would rise to $10 per gallon and in India, the price of petrol could rise to Rs 75 to Rs 150 per litre, depending on the subsidy levels, with serious negative economic consequences. The high oil price will also further fuel the inflationary fires all over the world. Central banks will be forced to raise interest rates to fight inflation and thereby slowing the economies even further. The increased diversion of agricultural outputs to produce biofuels and high cost of fertilisers could lead to very high food prices and shortage of food. The worst affected will be the poorer countries which will be faced with recession, high inflation and shortage of food perhaps ever famines.
Copper Rises in London After China’s Inventories Decline, Port Disruption – Copper rose for the first time in three days in London after stockpiles declined in China, the world’s largest buyer, amid supply disruptions in Chile. Copper stockpiles in warehouses monitored by the Shanghai Futures Exchange fell 5.8 percent this week, the exchange said on its website today. Prices have climbed 3.2 percent this week after owners of the Collahausi mine in Chile indicated they may not be able to supply all customers after a port accident. “A drawdown in Shanghai inventories and ongoing concerns over Collahuasi’s main exit route for its concentrates are keeping copper supported,”
Oil Rises in London as Snowstorm Returns, Inflation Spurs Commodity Demand – Crude oil in London traded within 1 percent of a two-year high, as the return of snowstorms to parts of Europe buoyed expectations that fuel demand will increase. Brent crude climbed to its highest since October 2008 earlier today after a report yesterday showed confidence among U.S. consumers improved. Prices will extend gains next week, according to a Bloomberg News survey of analysts. OPEC’s seven Arab-country members are due to meet in Cairo tomorrow. Brent crude oil for February settlement rose as much as 49 cents, or 0.5 percent, to $94.74 a barrel on the London-based ICE Futures Europe exchange, the highest since Oct. 2, 2008. It traded for $93.90 a barrel at 11:12 a.m. London time. Prices have gained 2.4 percent this week, and 20 percent this year. West Texas Intermediate oil for February delivery advanced $1.03 to $91.51 a barrel yesterday on the New York Mercantile Exchange, the highest settlement since Oct. 3, 2008. Prices are up 15 percent this year. Electronic and floor trading is closed today because of the Christmas holiday.