April 18 Market: Oil slumps 3%, Iron ore at 5-week high, Robusta coffee hits record high

Oil prices fell 3% to settle at $100.18 a barrel on April 17, 2024, amid concerns that demand worries would outweigh supply risks from the Middle East. Gold prices dipped but held near record highs. Iron ore rose to its highest in more than five weeks on improving steel demand and restocking ahead of a holiday.


Oil Prices Slide 3% on Worries That Demand May Outweigh Risks to Middle East Supply

Oil prices fell 3% as U.S. inventories rose, economic data from China weakened, and the U.S. moved to bolster support for Ukraine and Israel.

Brent crude futures for June fell $2.73, or 3%, to $87.29 a barrel, while U.S. West Texas Intermediate (WTI) crude for May delivery fell $2.67, or 3.1%, to $82.69 a barrel, the biggest decline since March 20, 2024.

Oil prices have declined this week as economic headwinds counter gains from geopolitical tensions, with markets eyeing how Israel might respond to Iran’s weekend attack.

Analysts do not expect Iran’s unprecedented drone and missile strikes on Israel to spur sweeping U.S. sanctions on Iran’s oil exports.

U.S. crude stockpiles rose by 2.7 million barrels to 460 million barrels last week, nearly double the 1.4-million-barrel increase analysts had expected in a Reuters poll.

Oil’s losses accelerated after U.S. House Speaker Mike Johnson said legislation to support Ukraine, Israel, and the Indo-Pacific would be introduced “early today”, with a fourth bill to “address other Russian, Chinese, and Iran malign activities” coming later in the day.

Top Federal Reserve officials including Chair Jerome Powell on Tuesday backed away from any guidance on when they might cut interest rates, dashing investors’ hopes for cheaper borrowing costs this year.

In China, the economy grew faster than expected in the first quarter, but other indicators showed that domestic demand remained weak.

Gold Slides Modestly, but Holds Near Record Highs

Gold prices dipped but traded near record highs hit last week, as pressure from prospects of lower U.S. interest rates offset the safe-haven demand arising from geopolitical unrest in the Middle East.

Spot gold fell 0.2% to $2,376.39 per ounce, as of 18:15 GMT. It hit an all-time high of $2,431.29 on Friday last week. U.S. gold futures slipped 0.8% to $2,388.40.

Iran said its military was ready to confront any attack by IsraelIran carried out its first direct attacks on Israel last weekend in retaliation for a suspected Israeli strike on an Iranian diplomatic compound in Damascus on April 1.

The market is pricing in a 71% chance of a U.S. rate cut by September 2024. Higher interest rates dull the appeal of holding non-yielding bullion.

Spot silver  rose 1.1% to $28.39. The global silver deficit is projected to widen by 17% to 215.3 million troy ounces in 2024 as demand rises by 2% on strong industrial consumption and total supply shrinks by 1%, the Silver Institute said. Spot platinum  fell 1.5% to $942.79 and palladium rose 1.4% to $1,027.56.

Iron Ore Jumps to Over 5-Week Highs on Better Steel Market, PreHoliday Restocking

Iron ore futures jumped to their highest in over five weeks, aided by an improved steel market outlook and expectations of restocking ahead of a holiday in top steel producer China.

The most-active iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trading 4.25% higher at 870 yuan ($120.20) a tonne, its highest since March 11, 2024.

Iron ore futures for May 2024 on the Singapore Exchange were up 5.63% at $115.55 a tonne, their highest since March 8, 2024.

Near-term iron ore demand is expected to remain firm as mills tend to keep production high amid recovering profits and downstream demand, analysts said.

While construction steel demand is still relatively weak year on year, steel consumption from the manufacturing sector has been strong, analysts with Huatai Futures said.

Meanwhile, data from steel资讯provider Gangguwang showed China’s construction steel consumption rose by more than 10% week on week as of April 17, 2024.

Coking coal and coke prices rose 2.64% and 1.87%, respectively.

On the Shanghai Futures Exchange, construction rebar rose 1.94%, hot-rolled coil added 1.29%, wire rod gained 0.74%, and stainless steel edged up 0.43%.

Copper and Aluminum Rise as Dollar Dips

Copper and aluminum prices rose in London, supported by weaker dollar and concerns on supply offsetting worries about demand from China. Three-month copper on the London Metal Exchange (L

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