Oil up nearly 4%
Oil prices spiked by nearly 4% after Saudi Arabia floated the idea of OPEC+ production cuts to support prices in the event that Iranian crude returns to the market and the possibility of a drop in US inventories.
According to state news agency SPA, Saudi Arabia’s Energy Minister said OPEC+ has measures to tackle the challenge including production cuts.
Ending the session on August 23, Brent crude oil increased by 3.74 USD or 3.9% to 100.22 USD/barrel. WTI oil rose $3.38, or 3.7%, to $93.74 a barrel. Brent crude closed its highest since August 2 and WTI the highest since August 11.
Iran’s ability to restore crude supplies and fears of a recession coupled with consecutive weekly increases in US crude inventories, softening gasoline demand and the approaching refinery maintenance season have kept oil prices down. decreased in recent weeks.
However, nine OPEC sources told Reuters that an OPEC+ production cut is unlikely and would coincide with a return to the market for Iranian crude if Tehran strikes a nuclear deal with the West.
On August 22, a senior US official told Reuters that Iran had dropped some of its key demands for reinstating the nuclear deal.
The spike in oil prices in 2022, in March to a record high of $147 after the Russia-Ukraine conflict is exacerbating supply concerns. Fears of a global recession, rising inflation and weaker demand have weighed on prices.
Highlighting tight supply, the latest weekly US inventory reports are expected to show crude falling by 900,000 barrels last week.
Gold rose
Gold prices rose after six straight sessions of decline as the dollar and US Treasury yields fell on weak US business activity data.
Spot gold rose 0.7 percent to $1,747 an ounce. Prices have fallen in the previous six sessions and hit their lowest since July 27 at $1,727.01 an ounce on August 22. US gold for December delivery closed up 0.7 percent at $1,761.2 an ounce.
Activity in the US private business sector fell for a second straight month in August, to an 18-month low.
The US dollar index fell 0.5% making gold cheaper for buyers in other currencies, falling US Treasury yields made gold more attractive.
Focus now on Fed Chairman Jerome Powell’s speech at the annual global central bank conference in Jackson Hole on August 26.
Copper rose
Copper prices rose on low inventories, signs of improving demand in China and fears that soaring energy prices could force refiners to cut output.
However, investors remain wary of a slowing global economy that is threatening to reduce demand.
Copper prices are up 17% from mid-July lows, but are still down 16% since the start of the year and have been largely stable in recent weeks.
On the London Metal Exchange (LME), copper rose 1% to $8,110 a tonne.
Also supporting copper was the USD drop from 20-year highs making the metals cheaper for buyers in other currencies. According to analyst Ole Hansen of Saxo bank, the price of copper will increase to about $ 9,000 / ton by the end of this year.
High energy costs mean that without state support or price barriers, copper smelters in Europe would face a loss of $2.7 billion, according to Bank of America analysts.
In China, the world’s biggest metal consumer, this week cut lending rates and moved to support the property market.
LME-assured copper reserves fell to 72,250 tonnes from 121,200 tonnes in early July. Worries about supply on the LME pushed up the plus of the spot contract versus three-month futures to $51/ tons, the highest since February.
Iron ore and steel prices increase
China’s iron ore and steel prices rose as the government’s latest lending rate cut supported sentiment, while an improved pre-peak demand outlook for construction steel.
Iron ore for January 2023 on the Dalian Commodity Exchange closed up 2.5% to CNY 705 (US$102.71) a tonne, while the contract of steel bar in Shanghai rose 1.7% to CNY 4,052 a tonne. /ton.
On the Singapore Exchange, September futures rose 1.6 percent to $103.35 a tonne.
There have been signs that iron ore inventories could fall this week, with Mysteel data showing port inventories in China falling 0.3% week-on-week to 138.6 million tonnes on Aug.
Meanwhile, high temperatures in China will soon ease to allow construction activity to recover and the possibility of more industrial enterprises restarting after being stopped to save electricity.
But the long-term outlook remains bleak as the Covid-19 resurgence and slowing global economic growth weigh on steel demand.
Hot rolled coil in Shanghai rose 1.8% to 3,951 CNY/ton, stainless steel increased 0.9% to CNY 15,425/ton.
According to consulting firm SteelHome, spot iron ore price in China increased to 104 USD/ton on August 22.
Japanese rubber fell
Japanese rubber prices fell on weak domestic economic data, although a stronger Shanghai market and higher oil prices capped the decline.
Rubber contract for January 2023 on the Osaka exchange closed down 0.5 JPY or 0.2% to 227.7 JPY ($1.66)/kg.
In Shanghai, the price of rubber for January term, January 2023, increased by 70 CNY to 12,870 CNY (US$1,875)/ton.
Japan’s Nikkei stock index fell for a fourth straight session and closed down 1.19%.
Japan’s manufacturing activity growth slowed to a 19-month low in August as output and new orders fell sharply, amid growing pressure from raw material costs and energy plus demand. weakening global demand.
Coffee rose
December arabica coffee futures closed up 7.05 US cents or 3.2% at $2.2825/lb after hitting a seven-week high at $2.2860.
The market was supported by concerns about crop prospects in Brazil, with heavy rains early in the month prompting early blooms in some areas but later dry weather increasing the likelihood of insufficient moisture to sustain growth. development of coffee buds and berries.
Dealers say the recovery in stock exchanges still reflects falling prices but is now being dwarfed by crop concerns in Brazil.
Stocks of ICE-certified arabica stood at 627,750 bags on Aug. 22, up five consecutive days after setting a 23-year low at 571,580 bags on Aug. 15.
Robusta coffee for November delivery closed up $15, or 0.7%, to $2,258 a tonne.
Opposite road
Raw sugar for October delivery closed down 0.05 US cents or 0.3% at 17.89 US cents/lb.
Dealers say the market is waiting for a clearer outlook for the sugarcane crop in Central South Brazil in the 2022/23 crop year, with most analysts expecting output to increase despite Conab agency last week’s volume forecast. will be the lowest since 2011.
October white sugar futures rose 0.3 USD or 0.1% to 549.8 USD/ton.
Corn, soybean, wheat increase
U.S. corn prices rose 4.2 percent to a 7.5-week high as a report on crop health and a visit to key Midwest growing regions raised concerns about the size of the U.S. corn. The US harvest will fall lower than expected. The possibility of a fall in production in the fall also boosted the soybean market. Wheat increased with corn and soybeans.
Corn rose for the fifth consecutive session, gaining 7.4% this time around.
On the Chicago Mercantile Exchange, December corn futures closed up 26-1/4 US cents to 6.55-1/4 USD/bushel. Prices have peaked at $6.62, the highest since June 30.
November CBOT soybean futures rose 25-3/4 US cents to 14.61 USD/bushel.
Winter soft red wheat for December delivery rose 12-1/4 US cents to 8.00-1/2 USD/bushel.
Prices of some key items on the morning of August 24:
