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Oil and Gas Edge Higher, Precious Metals Retreat

Highlights:

  • ENERGY:
    Brent oil climbed by  3.1% or $2.25, to $75.85 a barrel. Meanwhile, WTI crude soared by 3.3% or $2.31, to $72.77 a barrel.
    Natural gas prices soared by 15.7% or $129.73 to $956.29 per thousand cubic meters in Europe.
  • METALS:
    The spot gold price was at $1,800.70 an ounce. Meanwhile, gold futures fell by 0.2% to $1,804.30 an ounce.
    Silver eased by 0.3% to $23.77 per ounce.|
    Three-month copper was trading with an increase of 0.5% at $9,486.50 a tonne on LME.
  • AGRICULTURAL:
    Corn futures for December delivery climbed by 7¢ to close at $5.20¼ a bu.
    Soybean futures for November delivery declined by 2¼¢ to close at $12.82½ a bu.

Oil surged after crude stocks fall in the US

Data released late Tuesday showing a larger-than-expected drop in US crude stocks supported crude oil prices. Besides, expectations of strong future demand based on rising vaccination rates are also contributing to their rise.

Brent oil climbed by 3.1% or $2.25, to $75.85 a barrel. Meanwhile, WTI crude soared by 3.3% or $2.31, to $72.77 a barrel.

Brent beat its highest levels since late July, while WTI hit an early August high.

The API reported a fall in crude reserves of 5.437 million barrels in the week ended September 10. In contrast, analysts expected an increase of 3.903 million barrels for the week. 

Traders continue to monitor the development of production damage caused by the impact of Hurricane Ida two weeks ago. It seems that Tropical Storm Nicholas has not hit Texas refineries. Still, it is responsible for leaving hundreds of thousands of homes and businesses without electricity. 

On Tuesday, IEA forecast a substantial market rebound from the fourth quarter of 2021. 

 

Natural gas prices soared in Europe

Natural gas prices soared by 15.7% or $129.73 to $956.29 per thousand cubic meters in Europe. It followed the Dutch TTF gas sudden advance on the ICE Futures exchange. At the beginning of the trading session, the gas price was $843.66 per thousand cubic meters. It started expanding later.

A Ukrainian News Agency reported that Russia’s gas monopoly Gazprom is artificially reducing the natural gas reserves in the USF of Europe.

 

Gold stabilizes near $1,800 an ounce, silver also slides

The price of gold has remained stable near the psychological barrier of $1,800 an ounce. The precious metal has advanced after a rise in US inflation which was slightly lower than expected. It has raised uncertainty about when the Federal Reserve will start reducing the asset purchase program.

At the time of writing, the spot gold price was at $1,800.70 an ounce, after hitting $1,808.50 an ounce in Tuesday’s session.

Meanwhile, gold futures fell by 0.2% to $1,804.30 an ounce.

According to ING analysts, with the US CPI data slightly lower than expected, some believe that the possible announcement of the beginning of the withdrawal of the Fed’s support program could be closer. That would be very positive for the price of gold.

After the CPI data, the Dollar index fell to its lowest level in a week. Meanwhile, 10-year US treasury yields dipped to their lowest since August 24.

Market participants wait for the next meeting of the Fed Council on monetary policy in the third week of September.

 

Silver eased by 0.3% to $23.77 per ounce. Analysts see dips in silver as a buying opportunity. 

There is no obvious bullish trend on silver yet. However, the bearish pressure seems to be losing strength.

 

Copper progressed on the dollar’s weakness

Copper prices on LME climbed on Wednesday following the decrease in the Dollar index. A weaker dollar supports metal prices since dollar-priced commodities are becoming cheaper for other currency holders.

Three-month copper was trading with an increase of 0.5% at $9,486.50 a tonne. Meanwhile, the most-traded copper contract for October delivery on the Shanghai Futures Exchange closed with a loss of 0.7% at 69,810 yuan a tonne.

The slowdown in Chinese construction activity has been weighing on the red metal prices. ANZ analysts expect industrial activity to resume from September, which would help metal demand to grow.

 

Corn is trading with profits while soybean sees mild falls

After USDA’s report, corn contracts increased their value. In contrast, soybean futures dropped under harvest pressure even though the Cargill grain terminal reopened at Westwego, La. 

Corn futures for December delivery climbed by 7¢ to close at $5.20¼ a bu. 

Meanwhile, soybean futures for November delivery declined by 2¼¢ to close at $12.82½ a bu. 

Grain shipping logistics continue to be affected after the damage caused by Hurricane Ida. Furthermore, as the harvest is close to the beginning. So, there is some additional pressure on prices.  

Corn futures have been on a rise since Tuesday after the USDA reported that the condition of crops worsened slightly in the last week. According to the agency, 58% of the lots are in Good to Excellent condition, one percentage point below the previous week. In addition, this data took traders by surprise, who expected the unchanged conditions.

 

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