Commodity Snapshot
Natural gas prices fell for the third consecutive trading session due to high inventory levels and lower demand due to a mild winter. The U.S. Energy Information Administration (EIA) predicted natural gas spot prices at Henry Hub at $2.27 per million British thermal units in 2024, a 14.4% decrease from its February forecast and a 10% decrease from 2023.
The EIA predicts Henry Hub spot prices to remain under $2 per million British thermal units in Q2, despite high U.S. natural gas inventories. The agency also increased its 2024 outlook for domestic oil production growth to 13.19 million barrels and total U.S. petroleum consumption to rise by 200 million barrels to 20.4 million barrels.
Oil prices rose due to strong demand in the US, supported by American Petroleum Institute data. The US inventory report will be focused on next. Gold prices climbed after a nine-session rally, while industrial metals reached a YTD high, with copper supported by supply issues and China smelters discussing cutting production to lift processing charges. Investors continue to gauge the Federal Reserve’s interest rate path.
Gold prices are expected to stabilize around $2,100 in the short term and break above $2,200 by the end of Q2 2022, according to Citi Research’s Aakash Doshi. Spot gold remains at $2,159.061.07 an ounce. Meanwhile, investors increased net bullish positions for copper by 5,296 lots for a fourth consecutive week, reaching 77,477 lots in the week ending March 8, 2024.
Chinese copper smelters reduced production due to raw material shortages, leading to a surge in copper futures. Net bullish bets for aluminum rose by 3,564 lots after two consecutive weeks of decline, reaching 10,839 lots. For zinc, money managers increased net bullish bets by 10,968 lots for a third consecutive week, reaching 23,143 lots.
Potentially relevant stocks include Freeport-McMoRan (FCX), Southern Copper (SCCO), Teck Resources (TECK), Ero Copper (ERO), BHP (BHP), Rio Tinto (RIO), Glencore (OTCPK:GLCNF) (OTCPK:GLNCY) and Anglo-American (OTCQX:AAUKF) (OTCQX:NGLOY).
Recent Commodity Price Movements
Energy
Crude oil (CL1:COM) +1.22% to $78.53/Bbl
Natural Gas (NG1:COM) -1.01% to $1.69/MMBtu
Metals
Palladium (XPDUSD:CUR) +2.32% to $1062.25/t.oz
Platinum (XPTUSD:CUR) +1.37% to $933.35/t.oz
Copper (HG1:COM) +1.31% to $3.9760/Lbs
Agriculture
Corn (C_1:COM) -0.37% to $427.4/BU
Wheat (W_1:COM) +0.27% to $537.42/Bu
Cotton (CT1:COM) +0.58% to $95.73/Lbs
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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. Commodity Snapshot Commodity Snapshot Commodity Snapshot
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.
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