Commodity snapshot shows Crude oil prices fell over 2% on Monday due to Middle East tensions easing, with Brent futures and U.S. West Texas Intermediate crude contracts experiencing a third-consecutive weekly loss.
Iran, OPEC’s third-largest oil producer, contributes 3% of global output. Demand outlook is influenced by US Federal Reserve’s potential higher interest rates.
UBS predicts Brent crude oil prices to rise to $91/bbl by mid-year, despite Middle East tensions. The bank believes geopolitical risk premiums will not last if supply disruptions occur, and attacks on critical energy infrastructure remain possible.
The energy sector will be a key focus, with companies like Exxon Mobil, Chevron, and Phillips 66 releasing earnings reports this week.
Gold prices retreated, with market focus shifting to fundamentals. Investors await U.S. inflation reading, no Fedspeak, and spot prices rose to $2,417 in the previous session.
The London Metal Exchange and Comex are halting Russian copper, nickel, and aluminium acceptance, but analysts predict temporary supply disruptions and increased premiums in certain regions.
Energy
Crude oil (CL1:COM) -1.81% to $81.63.
Natural Gas (NG1:COM) -1.34% to $1.74.
Metals
Palladium (XPDUSD:CUR) -1.35% to $1,020.50.
Platinum (XPTUSD:CUR) -0.69% to $937.00.
Gold (XAUUSD:CUR) -1.29% to $2,361.10.
Agriculture
Corn (C_1:COM) -2.56% to $431.66.
Wheat (W_1:COM) -2.49% to $552.63.
Must read book about investing – check here
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.