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Oil prices rise to the highest level in months due to concerns about Russia’s supply
Oil prices have risen to the highest level in months for the second consecutive session as traders assess how Ukraine’s recent attacks on Russian oil refineries will affect global oil supply.
US West Texas Intermediate crude oil futures rose 75 cents, or 0.9%, to close at $83.47 a barrel, the highest since October 27, 2023. Brent crude oil futures rose 0.6% to $87.38 a barrel, the highest since October 31, 2024.
Based on Hodes’ calculations, attacks on Russian oil refining plants could reduce global oil supply by about 350,000 barrels per day and push up US crude oil prices by an additional $3 per barrel.
Even if the attacks do not directly disrupt Russia’s crude oil supply, there is still a spillover effect on oil prices due to surging profit margins on refined products, analyst Bjarne Schieldrop of SEB Research wrote on Monday.
Oil has been supported by 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 falls as the US dollar strengthens
Gold prices fell as the US dollar strengthened a day before the Federal Reserve signaled its interest rate stance at the end of the central bank’s two-day policy meeting.
Spot gold fell 0.2% to $2,155.93 an ounce at 18:17 GMT, hovering near its lowest level in a week reached on Monday.
US gold futures fell 0.2% to $2,159.7. The US dollar rose 0.2% after hitting its highest level in more than two weeks earlier in the session, making gold more expensive for foreign buyers.
Gold hit a record high of $2,194.99 an ounce on March 8, 2024, but prices fell nearly 1% last week after higher-than-expected consumer prices and producer prices in February dampened hopes of the Fed cutting interest rates soon due to persistent inflation threats. Higher inflation has forced the Fed to keep interest rates high, weighing on non-yielding gold.
While the Fed is expected to keep interest rates steady on Wednesday, the market is awaiting comments from Fed Chair Jerome Powell on the latest interest rate outlook.
Copper falls as the US dollar rises and investors take profits
Copper prices fell in London as investors took profits from recent gains and the US Federal Reserve’s interest rate decision approaches.
Three-month copper futures on the London Metal Exchange closed down 1.3% at $8,971 a 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 as China’s top consumer.
Among other major base metals, tin and nickel have been affected after supply disruptions at major Indonesian producers showed signs of easing as the country’s leading tin miner resumed exports.
Tin prices on the London Metal Exchange fell 4.7% to $27,360 a tonne and nickel prices fell 2.8% to $17,370.
Indonesia has allocated mining quotas for around 70% of its estimated 2024 nickel ore production to date and has also provided some quotas for tin ore, copper ore, and bauxite, a raw material for aluminum production.
LME aluminum fell 0.3% to $2,271 a tonne, zinc fell 1.1% to $2,505, and lead rose 0.2% to $2,094.
Iron ore rises to nearly a week high on positive Chinese data, spot liquidity increases
Iron ore futures for May 2024 delivery at the China Commodity Exchange (DCE) rose 5.35% to CN¥827 (US$114.87) per tonne, the highest since March 13, 2024.
Iron ore futures for April 2024 delivery on the Singapore Exchange rose 2.91% to $106.9 per tonne, the highest since March 13, 2024.
China’s fixed asset investment increased 4.2% in the first two months of this year compared to the same period last year, surpassing expectations of a 3.2% increase.
Iron ore trading volume at major Chinese ports increased 66% from the previous session to 1.06 million tonnes, data from consulting firm Mysteel showed.
Coke prices and coking coal prices rose 3.59% and 2.49% respectively.
In Shanghai, rebar rose 2.85%, hot-rolled coil rose 2.99%, beams rose 2.14% while stainless steel was little changed.
Wheat and corn rise sharply; soybeans fall
Wheat and corn futures prices at the Chicago Board of Trade (CBOT) rose sharply as technical moves as traders sought to unwind bearish positions ahead of uncertain spring weather and forthcoming reports from the US Department of Agriculture, analysts said.
Soybeans fell due to the enormous supply pressure 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 a bushel.
Corn futures prices rose due to spillover from wheat and potentially adverse weather in the US Corn Belt. Corn rose 3-1/2 cents to $4.39-1/2 per bushel while soybeans closed 2-1/4 cents lower at $11.85-1/2 a bushel.
London cocoa stabilizes after reaching record high
London cocoa futures stabilize after hitting record highs as investors take profits despite a sharp drop in supply from leading producers Ivory Coast and Ghana. London cocoa for delivery in July 2024 fell 0.6% to £6,118 ($7,385.69) per metric tonne after setting a record high of £6,332. Cocoa for July delivery in New York fell 1.6% to $7,403 per metric tonne after hitting a record high of $7,735 on Monday.
Sugar falls, coffee rises
Raw sugar futures for May 2024 fell 2.7% to 21.57 cents per pound due to improved harvests in India and Thailand. White sugar for May 2024 fell 1.6% to $617.80 per metric tonne.
Robusta coffee for May 2024 rose 0.4% to $3,355 per metric tonne. Arabica coffee rose 0.3% to $1.8100 per pound.
Japanese rubber falls the least in 3 days
Japan’s rubber futures fell to a three-day low following 10 days of gains due to weaker oil prices. The August 2024 rubber contract closed down 7.7 yen, or 2.17%, at 346.5 yen ($2.31) per kilogram, its lowest since March 15, 2024. Rubber prices on the Shanghai Futures Exchange (SHFE) for May 2024 delivery fell ¥225, to end at ¥15,395 ($2123) per tonne. Prices hit their daily limit high of ¥15,805 at the start of the session.
Thailand’s leading rubber producer’s meteorological agency has warned of summer storms from March 19-20 that could damage crops.
The rubber contract on Singapore’s exchange for April 2024 delivery closed at 171.8 US cents per kg, down 0.87%.
Thailand’s leading rubber producer’s meteorological agency has warned of summer storms from March 19-20 that could damage crops.
The rubber contract on Singapore’s exchange for April 2024 delivery closed at 171.8 US cents per kg, down 0.87%.
Key commodity prices as of the morning of March 20, 2024
