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The Periodic Table of Commodity Returns

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The Periodic Table of Commodity Returns 2019

The Periodic Table of Commodity Returns 2019

In 2019, every major asset class finished in the black.

And although the broad commodity market finished up 17.6% on the year, the performances of individual commodities were all over the map. For those familiar with the sector, that’s pretty much par for the course.

That said, the lack of an obvious correlation in commodity markets also makes for a thought-provoking and humbling exercise: comparing the annual returns of commodities against the data from the past decade.

A Decade of Commodities (2010-2019)

Today’s visualization comes to us from U.S. Global Investors, and it compares individual commodity returns between 2010 and 2019.

You can use the interactive tool on their website to toggle between various settings for the table of commodity returns, such as breaking them down by category (i.e. energy, precious metals, etc.), by best and worst performers, or by volatility over the time period.

Let’s dive into the data to see what trends we can uncover.

Palladium: The Best Commodity, Three Years Straight

In 2019, palladium finished as the best performing commodity for the third straight year — this time, with a 54.2% return.

Palladium top performing commodity

You could have bought the precious metal for about $400/oz in early 2010, when it was a fraction of the price of either gold or platinum.

Nowadays, thanks to the metal’s ability to reduce harmful car emissions and an uncertain supply situation, palladium trades for above $2,000/oz — making it more expensive per ounce than both gold and platinum.

Oil and Gas: Opposite Ends of the Spectrum

As key energy commodities, oil and natural gas have an inherent connection to one another.

However, in 2019, the two commodities had completely diverging performances:

Palladium top performing commodity

Crude oil prices gained 34.5% on the year, making it one of the best commodities for investors — meanwhile, natural gas went the opposite direction, dropping 25.5% on the year. This actually cements gas as the worst performing major commodity of the decade.

“That’s Gold, Jerry!”

Finally, it’s worth mentioning that gold and silver had a bounceback year.

Gold gained 18.3% to finish with the best return the yellow metal has seen in a decade. Silver followed suit with a similar story, rallying 15.2% over the calendar year.

Gold and silver performance

Precious metals now sit at multi-year highs against an interesting economic and geopolitical backdrop to start 2020.

Where do you see the above commodities ending up on next year’s edition of the rankings?

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Chart of the Week

Visualizing the Biggest Risks to the Global Economy in 2020

The Global Risk Report 2020 paints an unprecedented risk landscape for 2020—one dominated by climate change and other environmental concerns.

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Top Risks in 2020: Dominated by Environmental Factors

Environmental concerns are a frequent talking point drawn upon by politicians and scientists alike, and for good reason. Irrespective of economic or social status, climate change has the potential to affect us all.

While public urgency surrounding climate action has been growing, it can be difficult to comprehend the potential extent of economic disruption that environmental risks pose.

Front and Center

Today’s chart uses data from the World Economic Forum’s annual Global Risks Report, which surveyed 800 leaders from business, government, and non-profits to showcase the most prominent economic risks the world faces.

According to the data in the report, here are the top five risks to the global economy, in terms of their likelihood and potential impact:

Top Global Risks (by "Likelihood") Top Global Risks (by "Impact")
#1Extreme weather#1Climate action failure
#2Climate action failure#2Weapons of mass destruction
#3Natural disasters#3Biodiversity loss
#4Biodiversity loss#4Extreme weather
#5Humanmade environmental disasters#5Water crises

With more emphasis being placed on environmental risks, how much do we need to worry?

According to the World Economic Forum, more than we can imagine. The report asserts that, among many other things, natural disasters are becoming more intense and more frequent.

While it can be difficult to extrapolate precisely how environmental risks could cascade into trouble for the global economy and financial system, here are some interesting examples of how they are already affecting institutional investors and the insurance industry.

The Stranded Assets Dilemma

If the world is to stick to its 2°C global warming threshold, as outlined in the Paris Agreement, a significant amount of oil, gas, and coal reserves would need to be left untouched. These assets would become “stranded”, forfeiting roughly $1-4 trillion from the world economy.

Growing awareness of this risk has led to a change in sentiment. Many institutional investors have become wary of their portfolio exposures, and in some cases, have begun divesting from the sector entirely.

The financial case for fossil fuel divestment is strong. Fossil fuel companies once led the economy and world stock markets. They now lag.

– Institute for Energy Economics and Financial Analysis

The last couple of years have been a game-changer for the industry’s future prospects. For example, 2018 was a milestone year in fossil fuel divestment:

  • Nearly 1,000 institutional investors representing $6.24 trillion in assets have pledged to divest from fossil fuels, up from just $52 billion four years ago;
  • Ireland became the first country to commit to fossil fuel divestment. At the time of announcement, its sovereign development fund had $10.4 billion in assets;
  • New York City became the largest (but not the first) city to commit to fossil fuel divestment. Its pension funds, totaling $189 billion at the time of announcement, aim to divest over a 5-year period.

A Tough Road Ahead

In a recent survey, actuaries ranked climate change as their top risk for 2019, ahead of damages from cyberattacks, financial instability, and terrorism—drawing strong parallels with the results of this year’s Global Risk Report.

These growing concerns are well-founded. 2017 was the costliest year on record for natural disasters, with $344 billion in global economic losses. This daunting figure translated to a record year for insured losses, totalling $140 billion.

Although insured losses over 2019 have fallen back in line with the average over the past 10 years, Munich RE believes that long-term environmental effects are already being felt:

  • Recent studies have shown that over the long term, the environmental conditions for bushfires in Australia have become more favorable;
  • Despite a decrease in U.S. wildfire losses compared to previous years, there is a rising long-term trend for forest area burned in the U.S.;
  • An increase in hailstorms, as a result of climate change, has been shown to contribute to growing losses across the globe.

The Ball Is In Our Court

It’s clear that the environmental issues we face are beginning to have a larger real impact. Despite growing awareness and preliminary actions such as fossil fuel divestment, the Global Risk Report stresses that there is much more work to be done to mitigate risks.

How companies and governments choose to respond over the next decade will be a focal point of many discussions to come.

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Cities

Growth and Decline: Visualizing U.S. Population Change by County

Rural counties across the U.S. are losing residents as large cities and the coasts are growing. This map shows U.S. population change by county.

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Visualizing U.S. Population Change by County (2010-2018)

The American Heartland continues to feed the growth of urban centers — not only with its agricultural products and natural resources, but with its people as well.

Across the nation, coastal urban centers are adding new citizens, while rural counties are seeing their populations decline. Outside of this general trend, fracking has created some rare pockets of growth in rural areas, while coal mine closures have had the opposite effect.

Today’s map comes to us from Reddit user jinkinson, and it maps U.S. population change by county from 2010 to 2018, using data from the U.S. Census Bureau.

Uneven Growth

From 2010 to 2018, the total United States population increased by 6% from 308,745,538 to 327,167,434. However, it’s clear that not all counties participated in this uptrend.

There are 3,142 counties counted as part of this map (Puerto Rico and U.S. territories excluded). Of these, 1,489 experienced positive growth, while 1,653 saw a decline.

Which Counties are Growing the Fastest?

America’s economy has grown for over a decade, but that growth increasingly concentrates in 1% of the nation’s counties.

In fact, just 31 counties were responsible for 32.3% of the U.S. gross domestic product (GDP) in 2018, according to data from the Bureau of Economic Analysis.

Although economic concentration tells part of the story, a view of changing population patterns can help us see where physical growth is happening across the country.

Top 20 Counties for U.S. Population Growth

RankStateCounty Name2010 Population2018 Population% Change
#1North DakotaMcKenzie County6,36013,632114%
#2TexasLoving County8215285%
#3North DakotaWilliams County22,39835,35058%
#4TexasHays County157,107222,63142%
#5UtahWasatch County23,53033,24041%
#6TennesseeTrousdale County7,87011,01240%
#7TexasHudspeth County3,4764,79538%
#8FloridaSumter County93,420128,75438%
#9FloridaOsceola County268,685367,99037%
#10TexasComal County108,472148,37337%
#11TexasKendall County33,41045,64137%
#12IowaDallas County66,13590,18036%
#13GeorgiaForsyth County175,511236,61235%
#14TexasFort Bend County585,375787,85834%
#15TexasWilliamson County422,679566,71934%
#16FloridaSt. Johns County190,039254,26134%
#17North DakotaMountrail County7,67310,21833%
#18GeorgiaLong County14,46418,99831%
#19South DakotaLincoln County44,82858,80731%
#2VirginiaLoudoun County312,311406,85030%

At the top of the list is McKenzie County, North Dakota, which experienced a growth of 114% in its population from 2010 to 2018. This is due to the shale gas industry that flourished in the area. Interestingly, all of North Dakota’s active oil and gas rigs are in just four counties: McKenzie, Dunn, Williams, and Mountrail, three of which make the top 20 list above.

The fracking boom also fueled growth in Texas, where six counties made the list.

However, immediate economic success built on fracking sands and sensitive commodity prices may not be sustainable over the longer term. In fact, counties from a previous energy era are already seeing what happens when demand dries up.

Which Counties are Declining the Fastest?

If you look at a map of coal operations in the U.S. and compare it to the list of declining counties below, a stark pattern appears.

Half of country’s coal miners work in just 25 counties, and as mines close there are fewer economic opportunities available in those areas.

Top 20 Counties for U.S. Population Decline

RankStateCounty Name2010 Population2018 Population% Change
#1IllinoisAlexander County8,2386,060-26%
#2OklahomaBlaine County11,9439,485-21%
#3West VirginiaMcDowell County22,11318,223-18%
#4KansasMorton County3,2332,667-18%
#5ArkansasPhillips County21,75718,029-17%
#6TexasTerrell County984823-16%
#7TexasSchleicher County3,4612,895-16%
#8AlaskaPetersburg Borough3,8153,221-16%
#9ArkansasMonroe County8,1496,900-15%
#10LouisianaTensas Parish5,2524,462-15%
#11South CarolinaAllendale County10,4198,903-15%
#12MichiganOntonagon County6,780,5,795-15%
#13MississippiQuitman County8,2237,051-14%
#14AlabamaMacon County21,45218,439-14%
#15ArkansasLee County10,4248,985-14%
#16AlabamaPerry County10,5919,140-14%
#17VirginiaEmporia city5,9275,121-14%
#18MississippiCoahoma County26,15122,628-13%
#19ColoradoKit Carson County8,2707,163-13%
#20TexasMitchell County9,4038,145-13%

While coal counties have grim figures due to the changing domestic energy story, it’s Alexander County in Illinois that tops the list with a 26% decline in population over the time period.

In fact, the harsh reality is that 93% of Illinois’ counties have seen a decrease in population between 2010-2018.

State by State: Winners and Losers

The number of declining counties within a state reveals a larger picture. Visual Capitalist aggregated county level data to reveal the patterns of U.S. states.

State# Counties with Negative Growth# Counties with Positive Growth% of Counties with Negative Growth
Illinois93991%
Connecticut7188%
Kansas901586%
West Virginia46984%
Mississippi622076%
New York461674%
Nebraska662771%
Pennsylvania472070%
New Mexico231070%
Missouri793669%
Iowa683169%
Ohio583066%
Alabama432464%
Indiana593364%
Arkansas482764%
Michigan533064%
Louisiana392561%
Oklahoma443357%
Vermont8657%
Maine7654%
Kentucky635753%
Wyoming121152%
North Dakota272651%
Minnesota444351%
Rhode Island4450%
New Jersey101148%
Wisconsin343847%
Georgia738646%
South Carolina212546%
Virginia607345%
North Carolina435743%
South Dakota264039%
Alaska111838%
Texas9615838%
Nevada61135%
Tennessee326334%
Montana183832%
New Hampshire3730%
Maryland71729%
California154326%
Colorado164825%
Utah72224%
Florida155222%
Massachusetts31121%
Idaho93520%
Hawaii1420%
Oregon72919%
Arizona21313%
Washington2375%
Delaware030%
District of Columbia010%

Illinois tops the list with the most people leaving its counties, while areas such as the District of Columbia and Delaware experienced no declines.

What happens to a state where the majority of its counties are losing residents?

The Big Picture

Americans are seeking out opportunity where it resides: in the cities. The pursuit of fracking oil and gas created opportunities in regions beyond the coast or traditional urban centers.

However, the long term trend of concentration of people on coasts and in major urban centers will continue to impact infrastructure spending, labor mobility, and economic activity. America no longer derives the majority of its economic success from rural counties and industries.

It is unclear how rural counties will fare as their denizens continue to dwindle. What is clear is that the few that rely on natural resources for success will continue to experience the ups and downs of volatile commodity markets.

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