Standard & Poor's today announced the annual reweighting of its S&P Commodity index, with oil and gasoline continuing to have the greatest weightings, confirmed David Blitzer, managing director and chairman of the index committee at S&P.
"There's been a slight shift in favor of energy, which is no surprise because that's where there's been a lot of excitement," he said. The weightings are based on open interest in futures contracts in the commodities, which means they exclude speculative holders.
"This is not hedge funds that have decided to play crude oil; it's real people who are going to take delivery of a lot of the energy and use it," he said. "Behind all this excitement of sky-high energy prices, there are people learning about hedging their positions and acting accordingly."
Under the new weightings, natural gas will remain the most heavily weighted commodity, unchanged at 17.647%. Unleaded gas is next, with a 12.157% weighting, up from 10.324%. Heating oil moved to 12.131% from 11.494%, and crude oil increased to 11.407% from 9.735%. The other commodities with increased weightings are sugar, coffee, lean hogs and wheat.
Commodities with lower weightings are corn, soybeans, bean meal, bean oil, live cattle, copper, silver, cocoa and cotton.
Changes to the index, which comprises 17 commodities, will take effect on Feb. 13, 2006.