The Carbon Tax in Norway

The Carbon Tax in Norway

In 2012, the Environment Ministry of Norway announced that the carbon tax rate for its North Sea oil and gas production would be doubled in 2013. Norway is one of the major oil and gas producers and the third-largest energy exporter in the world. About 21% of Norway’s gross domestic product (GDP) is contributed by petroleum industry. At the same, Norway has a long coastline and many glaciers, so it is especially sensitive to the threat of climate change, which causes global warming and ocean rising. Norway government pays great attention to environmental sustainability and implements strict climate change policy.  The carbon taxes that it imposes on greenhouse gas emissions (GHG) per tonne are the highest in the world.

Carbon Tax

Carbon Tax is a tax based on GHG generated from burning carbon content fuels. It can be considered as a market-based mechanism to reduce GHG emissions. The administrative authorities usually decide the carbon tax rates. It places a price on each ton of GHG emitted, aiming at increasing market price of emission-intensive products and/or decreasing profits of their production. In order to minimize cost, the emission-intensive industries are forced to reduce GHG emissions. In a sense, by reducing burning of carbon content fuels, carbon tax stimulates to increase fuel efficiency, to promote clean energy, and to develop advanced technology. Eventually, it changes the investment, production, and consumption to an environmental friendly structure.

The Overview of Carbon Tax in Norway

Origin & Goals

Norway government started to impose carbon tax in 1991. Since 1996, it has been used as the main climate change policy in Norway. Norway‘s ambitious target in GHG emission is to reduce 30% from 1990 to 2020, and to become a country of net zero carbon emission by 2050(2011 IEA). At present, both Norway’s electricity industry and energy use in buildings have already realized GHG-emissionfree. The purpose of Norwegian government doubling its carbon tax on petroleum industry is to generate large tax revenue and to invest the revenue to innovate new technology for environmental friendly energy.

The Coverage of the Tax

Like other European countries, the carbon tax rates in Norway are different between industries. Petroleum production and natural gas extraction have been imposed the highest tax rate, which is $71.84 per tonne CO2 in 2013(Johnston 2012). In contrast, some other emissions-intensive industries, including air transport, cement and leca production, and aluminum industry, are exempted from the carbon tax system or imposed with lower tax rates. For example, the government levies a tax of only US$8.76 per tonne of CO2 on fishery industry (Johnston 2012). As a result, the carbon tax in Norway covers about 68% of its total CO2 emissions, or about 50% of its GHG emissions (UNFCCC 2006). Even though, Norway is still among the countries that levy the highest carbon taxes in the world. Its average carbon tax is about three or four times higher than the estimated price of quota in the Kyoto Protocol.

It seems that Norway has partially promoted its industrial efficiency through implementing the high carbon tax. Until 2003, GHG emissions per unit of production have been reduced by 22%, comparing with that in 1991(Sumner 2011). Since 1996, however, statistics from Ministry of the Environment of Norway show that emissions per unit of production stopped to decrease and even rose a little. On the other hand, even though Norway increased its industrial efficiency, its total GHG emissions, however, increased 15% from 1991 to 2008, because of the expansion of its industries, especially its petroleum industry (Summer 2011).

The Cost-effectiveness of the Tax

The cost-effectiveness of the carbon tax means that a country can achieve its emissions-reduction goals at the lowest cost, by using carbon tax as policy instrument. Theoretically, if all sectors and households are imposed the same carbon tax rate per unit of emissions over space and time, the costs can be minimized.

The cost-effectiveness of carbon tax in Norway has been proved to be limited, because the policy exempts too many industries that use carbon content fuels. The exemptions aim at protecting the competitiveness of some of its products. Therefore, these industries lack motivation to increase fuel efficiency and to reduce GHG emissions. For example, the metal industry and chemical industry are partially exempted from the carbon tax. If they were imposed the same tax rate as petroleum industry, these two industries would decrease their production and/or innovate their production process to reduce GHG emissions. On contrary, the direct and indirect carbon taxes on gasoline consumption account for 78% of the price in Norway (Bruvoll & Dalen 2009). However, the possibilities that the households reduce the consumption of gasoline and/or substitute it to cleaner energy is limited. General speaking, the carbon tax scheme has limited effects on reducing GHG emissions in Norway. Some scholars point out that the carbon tax only contributes 2% reduction of GHG emissions (Bruvoll & Larsen 2004).

Distributional Effects of the Carbon Tax

How to distribute the revenue from carbon taxes has great impact on the sustainability of the climate change policy. Usually, revenues from carbon taxes are distributed in three ways: (1) to develop special carbon mitigation programs, (2) to return tax revenue to individuals, such as through income tax reduction program, (3) to use as supplement of government budgets. The carbon tax is always considered as a regressive tax, which eventually imposes a heavy burden on low-income households.

Norway distributes the revenue from the carbon tax to general government accounts. Some scholars argue that if the government levies the high carbon tax as a way to increase its revenue, the carbon tax would not be an economically efficient method to reduce GHG emissions (Prasad 2008). With all its carbon tax revenue from petroleum and gas industries, Norwegian government established a special pension plan that is in the amount of $373 billion, or in other words nearly $80,000 per Norwegian in 2007(Turner 2008). This pension plan has the similar mechanism to that of income tax reduction program. Using carbon tax revenues to fund the pension plan has two benefits: 1) the carbon tax functions as a price on emission-intensive products to reduce the GHG emission; 2) the pension plan partially releases the financial burden of the low-income households.

Conclusion & Recommendation

As one of the pioneer countries in the world to implement the carbon tax, Norway might have tried to do its best. The high carbon tax that Norway imposed to some industries has partially reduced its GHG emissions. However, the carbon tax is not economically efficient, because the government intends to protect its domestic industries and exempts too many industries from the carbon tax. According to Hoel, an efficient carbon tax system “should be equal for all users of fossil fuels”(1996). It is recommended that Norwegian government should eliminate the policy of protecting the activities of increasing environmental damage, such as exempting or reducing carbon tax on certain energy-intensive industries.



Baranzini, A., Goldemberg, J., Speck,S.  A future for carbon taxes, Ecological Economics, Volume 32, Issue 3, March 2000, Pages 395-412.

Bruvoll, A. and Dalen, H. Pricing of CO2 Emissions in Norway, Statistic Norway, 2009.

Bruvoll, A. and Larsen, B. Greenhouse gas emissions in Norway: do carbon taxes work?, Energy Policy, Volume 32, Issue 4, March 2004, Pages 493-505, ISSN 0301-4215,

IEA, Energy Policies of IEA Countries: Norway 2011, OECD Publishing, 2011.

Hoel, M. Should a carbon tax be differentiated across sectors?, Journal of Public Economics, Volume 59, Issue 1, January 1996, Pages 17-32,

Johnston, A.  Norway Doubles Carbon Tax,  TriplePundit. October 2012.

Prasad, M. Taxation as a regulatory tool: Lessons from environmental taxes in Europe, Tobin Project Conference “Toward a New Theory of Regulation.” February, 2008.

Philander, S. Encyclopedia of Global Warming & Climate Change. 2nd ed. 3 vols. Thousand Oaks, CA: SAGE Publications, Inc., 2012. SAGE knowledge.

Sumner, J., Bird, L., & Dobos, H. Carbon taxes: A review of experience and policy design considerations. Climate Policy, 11(2), 922-943. 2011. Retrieved from

Turner, C. The carbon cleansers, Canadian Geographic. October 2008.

United Nations Framework Convention on Climate Change (UNFCCC) Compliance Committee. Report of the centralized in-depth review of the fourth national communication of Norway,2006.

It’s time to say goodbye

This is the last week of our trading game, so it is the time for us to say goodbye.

My portfolio value at the ending of this week is $159,506.51. The overall return is 59.51%. It is much higher than the interest of the government bonds and the return of mutual funds. Thus, I guess that my performance is not bad.

What I learnt from trading game

Reading finance news and the reports from USDA are important. In the first week of the trading game, I read the news and knew that China had huge demand of importing wheat. Therefore, I decided to long the wheat. During these six weeks, the price of wheat has spiked a lot, so more than half of my return was contributed by wheat. In addition, from USDA’s report, I knew that the projected yield of soybean in this year is relatively high, compared to the history data. I shorted the soybean and get almost $19,000 return.

Understanding how to do the technical analysis is really helpful.During these weeks, I learnt a little bit knowledge about how to analyze the market based on candlestick chart. This helps me to decide when is the best time to long or to short certain commodities. Because of this technical analysis, I could long commodities at relatively low prices and short them at relatively high prices.

Ration is a virtue of making the trading decision. I lose $11,075 on my corn future. There are several reasons that can explain this huge loss. First, before I longed corn, I never did any research and analysis, so I made a decision impulsively. Secondly, I always wanted to get more profits, even though I knew it was not a good time to hold the corn after I did the research. Thus, I missed many opportunities to sell it at a good price. Furthermore, I was afraid of suffering more loss so that I sold my corn at really low price, although I felt the price would rebound a little bit after its price collapsed. It is important that a good trader should be rational.

Hedge is a good way to reduce the risk? I put a question mark on this, because I am not sure whether the investors with limited money can reduce their investing risk through hedge or not. As an investor with limited money, his/her return is limited as well. At the same time, hedge will decrease their limited return further; sometimes it even causes negative return in reality. Theoretically, hedge may be a good strategy to reduce price risk. In practical, I doubt that.

I don’t have much to say for this week’s blog. This is a terrible week for me. My life is kind of messed up. To be honest, I can’t concentrate on doing anything. I hope I will have a better week next week.

So, good luck for me.

Candlestick Chart II

Portfolio Summary of Week Five:During this week, I made a few trades for corn and wheat. I am kind of addictive in candlestick chart, so the most decisions I made is based on it.


After the corn reached the lowest point of three years on last Friday, the price of corn rebounded a little this week. I longed 10 units of corn on Monday, and sold them on Wednesday.

The candlestick chart on Wednesday is called spinning top. The characteristic of spinning top is that both upper shadow and lower shadow are relatively long and the body is relative small. It means indecision. The small body indicates that the difference between the open price and the close price of corn on Wednesday was little. The two long shadows represent that both sellers and buyers were relatively active during this day, but neither buyers nor sellers can dominate the trade.  This spinning top of corn appeared after a long advance candlestick on Tuesday. It shows that the advantage of buyers may be limited and the increasing trend of corn price may change. Thus, I sold all my corn this day.


During the early days of this week, the price of wheat retraced, but the price continuously increased on Thursday and Friday. I longed 10 units wheat on Wednesday, so I had 25 units wheat in total. On the Friday morning, I sold 10 units wheat.

Below are the reasons to explain the decisions I made.

The candlestick chart of wheat

The candlestick chart of wheat on Wednesday has a long lower shadow. The long shadow means that most of trades are made during the day rather than near the open and close. The long lower shadows and short upper shadows represent that the sellers dominated the trades on Wednesday and drove the price of wheat decreasing. The buyers, however, showed strong interests in longing the wheat and bid prices higher by the end of the day. Thus, the close price was relatively strong.

The candlestick chart of Friday day is also very interesting. The body of candlestick is quite long which means that the price difference between open and close is large and the buyers are aggressive to long the wheat and control the trade.

The line chart of wheat on FridayFrom the chart, it is easy to find that the price of wheat dramatically increased in the early morning of Friday. I don’t really understand why this happened and the only commodity in my hand was wheat, so I sold 10 units wheat to reduce the risk. (I still remember the situation happened half month ago. The prices of agriculture commodities increased dramatically before the stock announcement of USDA on September 30. After this unanticipated announcement, the price of corn and soybean went down rapidly.)

Highlight Events of this Week

The USDA Re-Opened This means that the traders can get accurate reports and the volume of trade will increase. On next Monday, USDA will announce the US crop progress. On next Tuesday, it will announce the wheat data, which is really important for my wheat trading.

Wheat Prices Rise to 4-Month-High On Friday wheat price rose to the highest level since June. The reason is that the Argentina, the second-largest producer of wheat in the Southern Hemisphere, forecasts 8.8 million metric tons of wheat production for the 2013-2014 harvests. This is significantly lower than the forecast of USDA in September, which is 12 million metric tons. In addition, Russia may lose 4 million metric tons of wheat next year because rains restricted planting of winter crops. Please see Russia May Lose 4 Million Tons of Wheat as Rains Hamper Planting.

China GDP hits 7.8% The National Bureau of Statistics of China announced that the world’s second-largest economy grew 7.8% (faster than expected) during the third quarter of the year.

P.S. The news of economy growth of China is an important reason to explain that the prices of November crude oil rose 14 cents, or 0.1 percent, to $100.81 a barrel on Friday. Since crude oil functions as the benchmark of the commodity market, the GDP growth of China might be a good news for the traders of agriculture commodity whose trade is long-position.

Good luck ~

Why I did not do trades this week

There are several reasons to explain why I did not do trades this week.

Reason No.1: USDA is still closing. As an outsider of the market, it seems really hard to make decision of trade in the future market without any official information or data. Although there are many news (or we can call these as rumors) in the market, but it is difficult to recognize which is the truth. If we believe fake news, we will make wrong decision and suffer huge loss. Thus, I feel that becoming a market watcher may be a safe decision to avoid loss.

Reason No.2: After analyzing the candlestick graph, I found that the market is full of uncertainties, especially to soybeans.

This is the picture to explain the meanings of candlestick:

The red candlestick means price increasing at that day; the green candlestick means the price decreasing at that day.

The daily candlestick chart of corn:

The candlestick chart of corn shows that the price trend is going down and the trading volume is relatively small. This means that the price of corn would not fluctuate a lot in the short run and the market seems to be not really interested in corn, if there is no unanticipated news or announcement. Therefore, it is a little bit hard to make profits since the time is the most scarcity resource of a master student.


The monthly candlestick chart of wheat

From this chart of wheat, both peak and trough of the price cycle are higher than the previous one. This indicates that the price trend of wheat is going up. In addition, the price of wheat is near the trough, so it might be a good time to long wheat and held it in the long term.

The daily candlestick chart of wheat

This chart shows that the upper shadows of wheat are relatively long. It means that the daily price fluctuation of wheat is relatively wide, but the closing price is much lower than the highest price of the same day. Thus, the climbing space of the wheat price may be limited in the short run. In other words, the price of wheat may roll back. The lower shadow of wheat, however, is also relatively long. This shows that the price of wheat will not roll back a lot. Therefore, when the price rolls back, it might be a good time to long the wheat.

The daily candlestick chart of soybean

The candlestick chart of soybean is quite similar to the chart of corn. The major difference of these two charts is that there is obvious peak and trough in this graph.

Thus, it is kind of hard for me (the new comer of the market) to predict the price trend of soybean in the short run. The price of soybean might go down or might be rebound.

Reason No.3: There were so many due days this week. This is the most important reason to explain why I did not do many trades this week. I feel so exhausted.


Highlight Events of this Week:

The Corn Futures fall to Three-Year Low On Friday, the price of corn future falls to the lowest point for the last three-years; the price of soybean went down the most this month. There are two reasons to explain why this happened. Firstly, as the largest producer of corn and soybean, the US is harvesting much more soybeans and corns than expected. The supply of corn and soybean increases dramatically. Another reason is that the market expects that the US government may amend a biofuel mandate, because the current mandate may exceed refiners’ ability to blend ethanol into fuel. If this is the truth, the demand of corn may decrease.

PS: I am not sure whether these reasons will cause the prices of corn and soybean to continuously decrease. Because the US government is still shutting down, we lack of accurate information to judge the authenticity of the news. The market is always full of rumors. In addition, China shows strong interests to import more soybeans and corns. The quantities of import from China may be another important determinant of the price trend of corn and soybean.

I hope that I have more time to watch the market in the next week, but probably not. The midterm weeks are coming.

Happy Thanksgiving Day.

Bye-Bye, Corn

Portfolio Summary of Week One:

Finally, I sold all my corn. The total lost of my corn future is $11,075. I, however, learnt a lot. Yes, I have to say thank corn, although you let me lose so much money. (It is not real money, but I still feel disappointed^_^).

The lesson I leant from this tragic trade:

Be Fearful When Others Are Greedy and Greedy When Others Are Fearful. This is a famous saying from Warren Buffett. The saying is really easy to understand, but it is hard to be practiced. Because I am the newbie of the market, I cannot be so rational. I missed many opportunities to sell the corn at a better price. I always want to get more profit, even though I know it is not a good time to hold the corn. (Do I look like a gambler?) Also, I am afraid of suffering more loss so that I sold my corn at really low price, although I felt the price would rebound a little bit after its price collapsed on Monday. (Do I look like a coward?) Greed and fear can explain the reason of my huge loss on corn future.

The reflection of other things I did from this week:

You do things when the opportunities come along. I’ve had periods in my life when I’ve had a bundle of ideas come along, and I’ve had long dry spells. If I get an idea next week, I’ll do something. If not, I won’t do a damn thing. This is another saying from Warren Buffett. It can conclude other transactions that I did this week. After the prices collapsed on Monday, I covered all my short position corn and soybean futures that night because I had no idea what would happen in the following days. Although it was not the best price of the week, as a risk adverse, I thought that covering the contract and holding cash might be good decisions after price dramatically went down. On Thursday morning, I bought 5 units soybeans and hoped to sell it when the price rebounds. I probably have to set up a stop price since midterm week is coming (so many due days!!!) and I will not have enough time to watch the market.

Highlight Events of this Week:

Here comes the most boring part of my blog — news announcement.

The News of Corn, Wheat, and Soybean After the USDA announced that the stock of US corn and soybean are much more than market expected, the price of corn and soybean collapsed simultaneously on Monday. This, however, only influenced market in two days. The price of corn and soybean rebound since Wednesday. The news “Soybeans Rise as Informa Cuts U.S. Crop Forecast; Corn Advances” explain the reasons that soybean futures rose from Wednesday to Friday.

I found another news, “Commodities Market Impact Weather 10/04: Wet and Chilly Weekend”, that might be helpful for my trading decision of next week. Weather, as one of the most important variables of commodity market, undoubtedly influences decision-making. Rain in the soybean production areas may delay the harvest. It expects that the price of soybean future will rise, at least in a short term.

The US Government Shut Down The US government closed its doors on Tuesday because Congress could not reach a deal on a temporary spending budget bill. This is not the only fiscal crisis looming for the US economy. The debt ceiling is another and more serious issue of the economy. Because the US federal government has never defaulted before, it is hard to accurately predict how severe long debate over debt ceiling will effect the recover of the US economy.

PS: How can this event influence the agriculture commodity market? After the US government shut down, the USDA turned off its website and stopped to announce any agricultural data. The traders of future market have no way to access any official data of the US agriculture. The trading volumes of future market may decline because of lack of information and asymmetry of information.

Next week, I plan to watch other commodities, like milk or cattle (if I have more time). I am a little bit tired of watching wheat, corn, and soybean.

Corn Loses, Wheat Gains

Portfolio Summary of Week Two:

This Week’s Research and Personal Reflection:


According to the report of US government, the projected corn production in 2013 is 80 million bushels higher than the record (13.8 billion bushels). However, the sales of corn (including domestic consumption and exports) fell 10 percent in the fiscal year that ended on Aug. 31, 2013. This is the biggest fall since 1975. The increasing supply of US corn and the decreasing the demand of US corn may pressure the price of corn future to go down further, at least in the short run. From long run prospective, the increased stock capacity of corn may allow the farmers to sell their corn when price goes up. In addition, China, one of the largest agriculture commodity importers, consistently shows interest in importing huge amount of corn from the US. It seems that the downward pressure of corn future may be limit in the long run.


In this week, the price of wheat future continually rose and climbed to a two-month high. I think that there may be two reasons that can explain it. Firstly, since the major areas of the wheat production have suffered flood, the price of wheat in China boost dramatically in this month (about 3.4%). The Chinese government may have strong incentive to import wheat to keep down the domestic price. Thus, the traders expect tremendous import demand from China. Another reason is that the wheat belt in Argentina has been hit by frost. It may damage the crops. If Argentina, the world’s third largest wheat exporting country, suffers yield loss, the export supply of wheat in the worldwide may decrease remarkably and the price of wheat may increase significantly.


The harvest season of soybean is coming. Although it is hard to predict the accurate yield of soybean in the US, according to the USDA report, if there is no extreme weather condition, the projected yield of soybean is still high, compared to the history data. In addition, in this year, Brazil is going to overtake the US to be the top soybean producer.  It anticipates that the yield of soybean in the South American will be a record high in 2014. All these reasons may continue to pressure the price of soybean future downward.

What did I do this week:

Based on my research, I did

  1. Continued to hold wheat future
  2. Shorted the Soybean Nov13

The Lessons I leant from this week’s trading game:

No impulsive decisions. In the last week, I bought 13 units Corn Dec13 and lost money. Thus, I shorted 3 units of long-term Corn future in this week without doing any research and hoped to reduce the loss. I thought this might reduce risk. On Thursday, however, I found that I loss money on both short-term corn which I bought and long-term corn which I shorted (Sigh~).


Don’t be too greedy. According to my research of last week, I found that this is not a good time to buy corn. Thus, I watched the price change of corn regularly and wanted to sell it when my loss can be covered. However, when the price of corn went up, I did not sell it and wanted to gain more profit. The ending of my corn story is that I loss $1350 after the market closed on Friday.

Believe the research and ignore small fluctuations of the market. Here is the lesson that I learnt from my soybean trade. I shorted 5 units of Soybean Nov13 on Monday. On Wednesday, the price of soybean went up a little bit. I was afraid of losing money again, so I covered my soybean at that day. Although I earned $275 from this trade, the price trend of soybean future is still going down in the following days.

Highlight Event of this Week:

US Stock falls as the Federal Government Faces Possible Shut Down

U.S. stocks fell this week. This is the first weekly drop of Standard & Poor’s 500 Index since August. No evidence in the economic data shows the US will face a recession, the budget impasse, however, might cause a government shutdown and drive the economy into recession. The market worries about the risk that hurts economic growth in the US.

PS: I am not sure how this event will influence the commodity market. From point of view of economics, however, stock market and commodity market are both financial markets. Intuitively, if the investors lose confidence in the stock market constantly, they will look for investment opportunity in the commodity market.

The Calendar of Next Week (from USDA):

Good Luck for the next week trading!

The Tragedy of Wheat

What did I do in this week:


I started my future trade on Wednesday. From the Maize Dec13 chart I found that the price of Maize Dec13 at that time was near the lowest point of the price range. Therefore, I bought 13 units of Maize Dec13 in total on Wednesday and Thursday as my first try. I thought that I would not lose lots of money even if it would not perform very well. Luckily, I earned about $800 after the US Market closed on Thursday.

The commodity market is not a casino, so I did some research on Friday. According to USDA’s report “World Agricultural Supply and Demand Estimates” in September, the yield and quality of corn in this year will be higher than expected. As a result, the price trend of corn has been going down in the past few weeks. I hope that the price of corn future may rebound after it continuously declined in September. Then I can sell my corn future and short it.


Here comes my tragedy. I read some news from Chinese website on Thursday evening. I found that the central and eastern regions of China have suffered serious drought and persistent high temperature. This has caused crop failure on around 900,000 hectares of farmland. These regions are the major areas of rice production in China. China may have the worst harvest of rice in the decade. Thus, more wheat will be needed as the substitution of rice. However, the major areas of the wheat production in China, the northeast of China, have been hit by flood. More than 787,000 hectares of farmland were damaged in these regions. The yield of wheat in China has decreased severely. All these reasons explain my expectation that the import of wheat in China will increase dramatically.

Therefore, I decided to buy 10 units Wheat Dec13 on Friday. However, when I did this, I made two stupid mistakes: first, I chose a wrong order type. I should choose limit for my order, but I chose market instead. Because I placed the order before I went to sleep, my bid price was the open market price of wheat future on Friday, which was the highest price of that day. (Feeling so sad…..) My second mistake is even more stupid. On Friday morning, I surprisingly found that the wheat future I bought is not the Wheat Dec13, but the Dec14. I accidentally chose the wrong year.

I also tried to short 3 units of Wheat Dec13 on Friday and covered it at the end of the day. Fortunately, I earned about $200 on this.


I did not buy soybean future this week, because it seems that the price of soybean is too high and it may fall a little bit in the coming days. Also, according to USDA’s “World Agricultural Supply and Demand Estimates”, soybean production in the US is projected at 3.149 billion bushels, down 106 million due to lower yield prospects. However, according to the forecast, the increasing production of soybean in Brazil and Paraguay will offset the decreasing production of Canada, the US, and China. I think that the short run trend of soybean future might be ambiguous.

Portfolio Summary of Week One:

The Lessons I leant from this week’s trading game:

First, doing research is the soul of the future trading. Secondly, I should check my orders more carefully before I confirm them. (I lost $6,250, which seems to be the tuition that I paid for my mistakes. Fortunately, it is not real money.)

Highlight Events of this Week:

The US Federal Reserve’s Press Conference

In the Wednesday afternoon, the Fed announced that they had decided to maintain bond-buying stimulus for the purpose of supporting the U.S. economy. After this announcement, the gold price spiked over 4% to $1,364.60 an ounce and the U.S. dollar fell to a 7-month low against major currencies. Dow, S&P 500 ended at record high: 15,676.94 and 1,725.52 respectively.

Middle East Tension Eases

Syria agrees to submit the details of its chemical weapon to the OPCW arms watchdog at The Hague. To some degree, the Middle East tension eases. This progress put pressure on crude oil price to go down. The price of October crude oil future fell about 1.6% on Friday and the weekly loss is more than 3%: the price settled down to $104.67. The investors fear that the supply of crude oil will increase from the Middle East.

P.S. Crude oil functions as the benchmark of the commodity market. The decreasing of its price is probably one of the reasons to explain the price fall of the agriculture products on Friday.

The Calendar of Next Week (Bloomberg)

By the way, the future trade is very addictive. I hope that I can do better and be more patient in the next week.