Illustration
Oil rises to highest level in months over concerns about Russia’s supply
Oil prices have reached their highest level in months for the second consecutive session as traders assess how recent Ukrainian attacks on Russia’s oil refineries will affect global oil supply.
US West Texas Intermediate crude oil futures rose 75 cents, or 0.9%, to settle at $83.47 per barrel, the highest since October 27, 2023. Brent crude oil 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 push up 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 will still be a spillover effect on oil prices as profit margins for refined products surge, 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 US.
Gold falls as US dollar strengthens
Gold prices declined as the US dollar strengthened ahead of the Federal Reserve’s interest rate stance at the end of its two-day policy meeting.
Spot gold dropped 0.2% to $2,155.93 per ounce at 18:17 GMT, near a one-week low reached on Monday. US gold futures fell 0.2% to $2,159.7.
The US dollar rose 0.2% after hitting a more than two-week high earlier in the session, making gold more expensive for foreign buyers.
Gold hit a record high of $2,194.99 per 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 long-lasting inflation threats. Higher inflation has forced the Fed to keep interest rates high, weighing on non-yielding gold.
While the Federal Reserve is expected to keep interest rates steady on Wednesday, the market is awaiting comments from Fed Chairman Jerome Powell for the latest interest rate outlook.
Euro declines as US dollar rises and investors take profits
The euro fell in London as investors took profits from recent gains and the US dollar strengthened ahead of the Federal Reserve’s interest rate decision.
Three-month copper on the London Metal Exchange fell 1.3% to $8,971 per tonne.
The US currency is trading near its highest level since early March, making the dollar-priced metal more expensive for buyers using other currencies. It also weighs on sentiment as prospects for consumer demand in China, the top consumer, sowed caution.
Among other base metals, tin and nickel were affected after a disruption to supply from a major producer in Indonesia showed signs of easing as the top tin miner there resumes exports.
Tin on the LME fell 4.7% to $27,360 per tonne and nickel dropped 2.8% to $17,370.
Indonesia has so far announced production quotas for about 70% of its estimated 2024 nickel ore output and also set some quotas for tin ore, copper ore, and bauxite, 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 rose 0.2% to $2,094.
Iron ore at highest level in nearly a week thanks to China’s positive data, spot liquidity increases
Iron ore futures extended gains for a second straight session, soaring to their highest level in almost a week, on reserve activity in China.
Iron ore contract for May 2024 delivery on the Dalian Commodity Exchange (DCE) ended up 5.35% at 827 yuan ($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.
Fixed asset investments in China rose 4.2% in the first two months of this year compared to the same period last year, beating expectations for a 3.2% increase.
Iron ore trading volume at major Chinese ports rose 66% from the previous session to 1.06 million tonnes, data from consultancy firm Mysteel showed.
Coke and coking coal prices rose 3.59% and 2.49% respectively.
In Shanghai, rebar steel increased by 2.85%, hot-rolled coil steel rose by 2.99%, wire rod increased by 2.14%, while stainless steel remained unchanged.
Wheat, corn surge; soybeans decline
Wheat and corn futures on the Chicago Board of Trade (CBOT) rose sharply as technical moves saw traders unwinding short positions ahead of uncertain spring weather and upcoming reports from the US Department of Agriculture, analysts said.
Soybeans declined due to massive supply pressure from 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.
Corn futures rose as the spillover from wheat and potentially unfavorable weather in the US Corn Belt likely were factors. Corn increased by 3-1/2 cents to $4.39-1/2 per bushel, while soybeans finished down 2-1/4 cents at $11.85-1/2 per bushel.
London cocoa stable after hitting record high
London cocoa futures stabilized after hitting a record high as profit-taking by investors trumped steep declines in supplies from major producers Ivory Coast and Ghana. July 2024 London cocoa futures fell 0.6% to £6,118 per tonne after reaching a record high of £6,332. July 2024 New York cocoa fell 1.6% to $7,403 per 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 on improved weather in India and Thailand. May 2024 white sugar fell 1.6% to $617.80 per tonne.
Rubber
Japanese rubber futures fell to their lowest level in three days after a 10-day rally as oil prices weakened. August 2024 rubber contracts closed at 346.5 yen ($2.31) per kilogram, down 7.7 yen, or 2.17%, the lowest level since March 15, 2024. Rubber prices on the Shanghai Futures Exchange (SHFE) for May 2024 delivery fell 225 yuan, ending at 15,395 yuan ($2,138.43) per tonne. The price hit the daily limit high of 15,805 yuan earlier in the session.
The Thai Rubber Authority warned of summer storms from March 19-20 that could damage crops.
Singapore rubber contract for April 2024 closed at 171.8 US cents per kilogram, down 0.87%.
Key commodity prices as of March 20, 2024
