Commodities Update: Gasoline Price Rise, Phelps Dodge Expects Metal Prices to Stay High

Excerpt from today's One Page Annotated Wall Street Journal Summary (which you can get emailed to you every morning by signing up here):

Phelps Expects Firm Metals Prices To Help Repay Acquisition Debt

• Summary: Copper producer Phelps Dodge's stock fell 8.1% yesterday after it said it would take on $22 billion of debt to fund its acquisition of nickel and copper producers Inco and Falconbridge. On a conference call, Phelps Dodge's management claimed that "extremely strong cash flow" due to continued strong commodity prices would allow it to pay down the debt quickly.
• Comment on related stocks/ETFs: Phelps Dodge's (PD) CEO Steven Whistler is quoted in the article as saying "There's probably some froth in the current commodity prices", although he apparently added that strong fundamentals would continue to support metal prices.

COMMODITIES: With Ship Traffic Slowed, Oil and Gasoline Rise

• Summary: Two out of four oil refineries in southwestern Louisiana switched to operating at reduced rates yesterday due to a shipping bottleneck in the Calcasieu Ship Channel in Lake Charles caused by an oil spill last week. The price of gasoline and crude oil rose.
• Comment on related stocks/ETFs: One of the refineries is owned by ConoccoPhillips (CNC). This incident illustrates an interesting question for energy investors: if you expect the oil price to rise, are you better off buying the commodity via the new US Oil ETF (USO), or the diversified oil companies? Note a similar argument about buying the gold ETF (GLD) versus the largest gold producer, Newmont Mining (NEM).