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What happened to the energy prices?

Highlights:

  • ENERGY:
    WTI crude oil for November delivery increased by 12 cents to $80.64 a barrel on Tuesday. Brent crude futures for December delivery slipped by 23 cents to $83.42 a barrel.
    Natural gas futures November delivery expanded by 16 cents to $5.51 per 1,000 cubic feet. 
  • METALS:
    Gold futures for December delivery increased by $3.60 to $1,759.30 an ounce. Silver futures for December delivery slid by 16 cents to $22.51 an ounce. Meanwhile, December copper futures shed 4 cents to $4.33 a pound.
  • AGRICULTURAL:
    The most active soybean contract on the CBOT gained 0.6% at $12.05-3/4 a bushel.
    Meanwhile, CBOT corn was trading with a decrease of 0.3% at $5.21 a bushel.

Crude oil is trading above $80

WTI crude oil for November delivery increased by 12 cents to $80.64 a barrel on Tuesday. Brent crude futures for December delivery slipped by 23 cents to $83.42 a barrel. 

There is concern about oil supplies, and analysts think that it is not going to change in the short term.

OPEC revised its oil consumption estimate for this year in its monthly report. Also, US consumer prices increased more than expected in September, marking persistent inflationary pressures on the economy.

Putin stated crude prices can hit $100 a barrel.

Worries about winter shortages lose steam and push gas down

Natural gas futures November delivery expanded by 16 cents to $5.51 per 1,000 cubic feet. 

Both the European and US weather models showed a lower degree of temperature for the next days at night. The northern United States is forecast to have pleasant weather conditions this week and the next.

Next days are likely to bring gas demand below the seasonal average. 

Globally, gas reserves remain low after this year’s extreme weather conditions. Meanwhile, energy demand is increasing in China and elsewhere in Asia. Despite this, the international price increase has slowed in recent sessions after Russian President Vladimir Putin made public comments last week. Markets interpreted it as a guarantee of constant gas supply to Europe this winter. At the same time, Putin’s promises emphasized the power he exercises over the energy world.

So, analysts don’t expect to see the start of a strong rally until the cold weather hits.

 

Gold futures are advancing strongly

The dollar reached levels not since September 2020, driven by analysts’ expectations about the Fed’s next decision regarding monetary policy. 

Despite the labor market weakness, more analysts estimate that the monetary authorities will decide to start reducing their bond buy-back program this year. They believe the persistence of inflationary pressures could force the members of the Federal Reserve to begin to normalize their monetary policy.

However, the behavior of the price of gold seems to reflect uncertainty about this scenario. 

Gold futures for December delivery increased by $3.60 to $1,759.30 an ounce. Silver futures for December delivery slid by 16 cents to $22.51 an ounce. Meanwhile, December copper futures shed 4 cents to $4.33 a pound.

 

Soy recovers some of the losses

The FYO report highlighted that soybean futures rose on Wednesday after hitting a 10-month low in the previous session. This situation is due to the improved sentiment by the hopes of an increase in Chinese purchases. However, the forecasts of a wide global supply limited the gains.

The most active soybean contract on the CBOT gained 0.6% at $12.05-3/4 a bushel.

Meanwhile, CBOT corn was trading with a decrease of 0.3% at $5.21 a bushel.

Corn prices remained low after the USDA forecasted the US harvest above average trade expectations.  

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