Commodities Prices are Booming

Highlights:

• ENERGY:
  Brent crude futures increased by 0.8% or 67 cents to $80.20 a barrel. WTI crude futures gained 1% or 79 cents, to $76.24 a barrel.
  Natural gas futures for October delivery gained 11%, to $5.706 per million British thermal units. 
• METALS:
  Spot gold was trading with a loss of $7.77 at $1,741.66 on the NYMEX.
  Silver was trading at $22.57.
  Three-month copper on the LME fell by 1.1% to $9,258.
• AGRICULTURAL:
  Corn rose by 2.37% to $212.3 in Chicago.

Oil on the rise for the sixth consecutive day

Brent crude futures increased by 0.8% or 67 cents to $80.20 a barrel. WTI crude futures gained 1% or 79 cents, to $76.24 a barrel.

Crude oil has been on the rise for the sixth consecutive session due to the drop in supply. There are also talks that the increase in the prices of liquefied natural gas and coal may force users to turn to crude.

In addition, recovery from the damage caused by Hurricane Ida in the Southwestern United States is taking longer than expected. Meanwhile, demand is picking up due to the lifting of restrictions and the greater distribution of Covid-19 vaccines.

Today traders will react to the latest inventory report from the American Petroleum Institute. On Wednesday, the United States Energy Information Administration will publish data.

African giants have trouble producing more oil

The industry is now expecting a reduction in output from the OPEC+ members such as Nigeria and Angola. 

The main African oil exporters, Nigeria and Angola, will find it difficult to increase production to OPEC quota levels at least until next year, as lack of investment and persistent maintenance problems continue to weigh on the economy. Production sources at their respective oil companies have told Reuters.

Members of the OPEC+ group cut production last year to support prices when Covid-19 hit demand. Now they fail to increase production to meet growing global fuel needs.

OPEC and its allies agreed to increase production by 400,000 barrels a day from August through December 2021. However, Nigeria and Angola have been producing an average of 276,000 BPD less than expected. They are likely to remain below quota until the end of the year.

 

Natural gas prices are skyrocketing

Natural gas futures for October delivery gained 11%, to $5.706 per million British thermal units. It has been the most significant daily jump since February. 

The expiration of the October contract fuelled the move amid a potential global energy supply crisis.

Speculators are buying as much as they can. However, there is no cold weather forecast for the short term. Analysts believe this leaves the market vulnerable to a series of crashes as soon as the expiration process is completed. 

The rise has not come entirely by surprise. The rise in benchmark gas prices in Europe has also contributed to the move. 

In these circumstances, analysts find it difficult to say how far the prices could go, but they see risks of a considerable correction.

 

Precious metals dropped

Spot gold was trading with a loss of $7.77 at $1,741.66 on the NYMEX. 

The lure of gold was hit by a rise in benchmark 10-year US Treasury yields, surging to their highest level in nearly three months.

The dollar was also strengthening, putting even more pressure on the metal.

Independent analyst Ross Norman stated that gold is stagnated and can not go in either direction. 

The market will now focus on the speeches of Fed officials this week, including central bank chairman Jerome Powell.

Investors are also keeping an eye on developments related to Evergrande after the Chinese real estate giant missed a bond payment deadline last week. 

Silver also posted declines. The white metal was trading at $22.57. 

 

Copper slipped after rising by 0.35% 

Copper prices declined due to the stronger dollar. Worries about the impact of power cuts in China also weighed on the red metal prices. 

 

Three-month copper on the LME fell by 1.1% to $9,258. Despite sliding from its record reached in May, Copper is still up 20% so far this year.

 

Corn rises due to the advance of oil

Corn rose by 2.37% to $212.3 in Chicago. Traders cite opportunity purchases by part of the funds and the strong rise in oil. 

Now, the market was waiting for the report on the State of Crops in the United States. The advance of the harvest in the country puts downward pressure on prices. However, many producers are saving part of their harvest, waiting for better prices, which limits the falls.

The USDA reported that US soybean exports increased to a maximum of six months as that Louisiana Gulf Coast terminals steadily increased operations disrupted by Hurricane Ida. The USDA reported a sale of 334 thousand tons of soybeans destined for China for the 2021/21 season.