Commodity Snapshot shows Energy markets fell following crude oil’s largest weekly gain in two months, assessing demand, China’s factory output data, and the Red Sea crisis.
China’s industrial production expanded 5.6% in May, easing from 6.7% growth in the previous month, while retail sales grew 3.7%.
Oil broker PVM reports sluggish Chinese factory activity and a recent attack by the Iranian-backed group Houthi on a ship in the Red Sea, which led to a 90% decline in container shipping through the region between December 2023 and mid-February 2024.
Natural gas prices fell following two consecutive weekly declines, with total U.S. oil and gas rigs falling by four to 590 rigs. Gold prices moved lower as the U.S. dollar held steady. Global investors will closely monitor U.S. retail sales data and industrial production reports for rate cut clues. Chinese primary aluminium production rose 7.2% year-on-year in May.
Chinese steel inventories increased by 10.4% in early June to 16.1mt, while weekly inventories for all base metals fell, except lead, according to data from the China Iron and Steel Association.
Energy
Crude oil (CL1:COM) -0.11% to $78.36.
Natural Gas (NG1:COM) -2.42% to $2.81.
Metals
Palladium (XPDUSD:CUR) -0.06% to $881.50.
Platinum (XPTUSD:CUR) -1.04% to $952.80.
Gold (XAUUSD:CUR) -0.55% to $2,319.50.
Agriculture
Corn (C_1:COM) -1.01% to $445.43.
Wheat (W_1:COM) -2.56% to $597.04.
Soybeans (S_1:COM) -1.06% to $1,165.85.
Must read book about investing – check here Commodity Snapshot Commodity Snapshot Commodity SnapshotCommodity Snapshot European natural gas futures reached a two-week high of €31/MWh Commodity Snapshotdue to geopolitical tensions and supply disruption fears. Gas-fired power generation remains more profitable for utilities than coal-fired power.
European natural gas futures reached a two-week high of €31/MWh due to geopolitical tensions and supply disruption fears. Gas-fired power generation remains more profitable for utilities than coal-fired power.
Gold prices are expected to gain for the first time since October due to the US Federal Reserve’s anticipated interest rate cut in June. The Reserve Bank of India’s gold holding increased to 812.3 tonnes in January, from 803.58 tonnes in December 2023. However, Commerzbank sees limited upside potential due to the mystery surrounding the price increase. It is unlikely that gold prices will fall back to February levels, as the Fed is expected to cut interest rates in June.
Spot gold was trading -0.3% lower at $2,176.89 an ounce as markets awaited the release of U.S. CPI data, which could influence the Federal Reserve’s policy path. A hotter-than-expected reading could delay the central bank’s easing cycle. Low interest rates help bullion by reducing the opportunity cost of holding the zero-yielding asset. A mixed tone prevailed across commodity sectors, with China’s economic growth concerns affecting bulks and supply concerns supporting industrial metals.
Natural gas and crude oil prices were trading in the green, while oil prices fell earlier due to persistent demand concerns in China. NS Trading president Hiroyuki Kikukawa said that concerns over weak demand in China outweighed the extension of supply cuts by OPEC+. Mixed US jobs data prompted some traders to adjust positions. However, losses will be capped by increased geopolitical risk, with the possibility of a ceasefire in the Hamas-Israel war and conflict expansion in Russia and its neighbors. Europe remains the most impacted region, as oil product shipments from Asia have fallen since January. OPEC+’s voluntary production cut agreement could tighten the market as demand recovers from its seasonal lull.
Natural gas and crude oil prices were trading in the green, while oil prices fell earlier due to persistent demand concerns in China. NS Trading president Hiroyuki Kikukawa said that concerns over weak demand in China outweighed the extension of supply cuts by OPEC+. Mixed US jobs data prompted some traders to adjust positions. However, losses will be capped by increased geopolitical risk, with the possibility of a ceasefire in the Hamas-Israel war and conflict expansion in Russia and its neighbors. Europe remains the most impacted region, as oil product shipments from Asia have fallen since January. OPEC+’s voluntary production cut agreement could tighten the market as demand recovers from its seasonal lull.