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Oil rises to highest level in months on concerns about Russian supply
Oil prices have risen to their highest level in months for two consecutive sessions as traders assess how Ukraine’s recent attacks on Russia’s oil refineries will impact global oil supply.
The US West Texas Intermediate futures rose 75 cents, or 0.9%, to close at $83.47 per barrel, the highest since October 27, 2023. Brent crude futures rose 0.6% to $87.38 per barrel, the highest since October 31, 2024.
According to Hodes’ calculations, attacks on Russia’s oil refineries could lead to a reduction of approximately 350,000 barrels per day in global oil supply and increase US crude oil prices by an additional $3 per barrel.
Even if the attacks do not directly result in a loss of Russia’s crude oil supply, there is still a spillover effect on oil prices from the soaring profit margins of refined products, analyst Bjarne Schieldrop of SEB Research wrote on Monday.
Oil has also received support from reduced crude oil exports from Saudi Arabia and Iraq, as well as signs of stronger demand and economic growth in China and the United States.
Gold declines as USD strengthens
Gold prices have declined as the US dollar strengthens a day before the Federal Reserve signals its stance on interest rates at the end of its two-day policy meeting.
Spot gold fell 0.2% to $2,155.93 per ounce at 18:17 GMT, nearing its lowest level in a week reached on Monday. US gold futures also fell 0.2% to $2,159.7. The USD edged up 0.2% after hitting a more than two-week high in the session, making gold more expensive for foreign buyers.
Gold reached a record high of $2,194.99 an ounce on March 8, 2024, but prices fell nearly 1% last week after higher-than-expected US consumer and producer prices in February dampened hopes of an early Fed rate cut due to persistent inflation threats. Higher inflation forces the Fed to keep interest rates high, putting pressure on non-yielding gold.
Although the Fed is expected to maintain stable interest rates on Wednesday, the market is awaiting comments from Fed Chair Jerome Powell for the latest interest rate outlook.
Copper declines as USD rises and investors take profits
Copper prices have fallen in London as investors take profits from recent gains and the US dollar strengthens ahead of the US Federal Reserve’s interest rate decision.
Three-month copper on the London Metal Exchange (LME) closed down 1.3% at $8,971 per tonne.
The US currency is trading near its highest level since early March, making the dollar-denominated metal more expensive for buyers using other currencies. It also weighs on sentiment is the outlook for demand in China, the top consumer of industrial metals.
Among other base metals, tin and nickel have been affected after supply disruptions in major Indonesian producers show signs of easing as the country’s top tin exporter resumes shipments.
Tin on the LME fell 4.7% to $27,360 per tonne and nickel fell 2.8% to $17,370.
Since the start of the year, Indonesia has issued mining output quotas for an estimated 70% of its 2024 nickel ore production and also provided some quotas for tin, copper, and bauxite ore, a raw material for aluminum production.
LME aluminum fell 0.3% to $2,271 per tonne, zinc fell 1.1% to $2,505, and lead increased 0.2% to $2,094.
Iron ore at highest level in nearly a week thanks to positive Chinese data, spot liquidity rises
Iron ore futures have extended gains for a second consecutive session, reaching their highest level in nearly a week, due to reserve activity in China.
The May 2024 iron ore contract on the Dalian Commodity Exchange (DCE) closed up 5.35% at 827 yuan ($114.87) per metric tonne, the highest since March 13, 2024.
The April 2024 iron ore contract on the Singapore Exchange rose 2.91% to $106.9 per metric tonne, the highest since March 13, 2024.
Fixed asset investment in China increased 4.2% in the first two months of this year compared to the same period last year, exceeding expectations for a 3.2% increase.
Iron ore trading volume at major Chinese ports increased by 66% compared to the previous session, reaching 1.06 million tonnes, according to data from consulting firm Mysteel.
Coking and coke rose 3.59% and 2.49%, respectively.
In Shanghai, rebar increased 2.85%, hot-rolled coil rose 2.99%, steel billet increased 2.14%, while stainless steel changed little.
Wheat, corn surge; soybean decreases
Wheat and corn futures on the Chicago Board of Trade (CBOT) have surged due to technical moves as traders look to unwind short positions ahead of uncertain spring weather and upcoming reports from the US Department of Agriculture, analysts said.
Soybeans fell due to massive supply pressures in South America and reduced demand from China for US soybeans.
CBOT wheat rose 9-3/4 cents, or 1.8%, to $5.52-1/2 per bushel.
CBOT corn rose due to spillover from wheat and potentially unfavorable weather conditions in the US Corn Belt. Corn futures increased 3-1/2 cents to $4.39-1/2 per bushel, while soybeans ended down 2-1/4 cents at $11.85-1/2 per bushel.
London cocoa stabilizes after hitting record high
London cocoa futures have stabilized after hitting a record high as investors take profits despite a sharp decline in supplies from top producers Ivory Coast and Ghana. July 2024 London cocoa futures fell 0.6% to £6,118 per tonne after setting a record high of £6,332. July 2024 cocoa futures in New York fell 1.6% to $7,403 per tonne after reaching a record high of $7,735 on Monday.
Sugar decreases, coffee increases
Raw sugar futures for May 2024 fell 2.7% to 21.57 cents per pound due to improved harvest prospects in India and Thailand. White sugar futures for May 2024 ended down 1.6% at $617.80 per tonne.
May 2024 robusta coffee futures rose 0.4% to $3,355 per tonne, while arabica coffee increased 0.3% to $1.8100 per pound.
Japanese rubber at lowest level in three days
Japanese rubber futures have fallen to their lowest level in three days after ten days of gains as oil prices weaken. The August 2024 rubber contract closed down 7.7 yen, or 2.17%, at 346.5 yen ($2.31) per kilogram, the lowest level since March 15, 2024. Rubber prices on the Shanghai Futures Exchange (SHFE) for May 2024 delivery fell 225 yuan to close at 15,395 yuan (2,138.43 USD) per tonne. Prices had hit the daily upper limit of 15,805 yuan earlier in the session.
The Thai Rubber Authority’s meteorological agency has warned of summer storms from March 19-20 that could damage crops.
Rubber futures on Singapore Exchange for April 2024 delivery ended the session at 171.8 US cents per kilogram, down 0.87%.
The Thai Rubber Authority’s meteorological agency has warned of summer storms from March 19-20 that could damage crops.
Rubber futures on Singapore Exchange for April 2024 delivery ended the session at 171.8 US cents per kilogram, down 0.87%.
Key commodity prices on 20/03/2024
