Oil drops 1% because the US is not in a hurry to replenish strategic reserves
Oil prices closed down 1%, reversing early gains after US Energy Secretary Jennifer Granholm said replenishing the country’s Strategic Petroleum Reserve (SPR) would take several years.
Mr. Granholm’s comments raised concerns about oversupply, especially as the Energy Department’s plan to free up an additional 26 million barrels is part of Congress’ mandate.
Closing session 23/3, Brent crude oil fell 78 US cents or 1% to 75.91 USD/barrel. WTI oil fell 94 US cents, or 1.3%, to $69.96 a barrel.
The grades were up about 1% before Granholm spoke, bolstered by a falling dollar and rising gasoline prices.
The USD index traded at its lowest level since February 3, a day after the Fed hinted it might stop raising interest rates.
Also supporting oil prices, RBOB gasoline hit 10-day highs after the US Energy Information Administration said inventories of this product last week fell the most since September 2021.
Rising gasoline demand will encourage refineries to use more oil to produce fuel.
Goldman Sachs said demand for commodities is surging in China, the world’s biggest oil importer, with oil demand exceeding 16 million bpd. The bank forecasts that Brent will reach $97 per barrel in the second quarter of 2024.
Gold rose as the Fed implied a halt to interest rate hikes
Gold prices continued to rise for a second straight session, as US Treasury yields fell after the US Federal Reserve signaled the end of a possible monetary tightening cycle.
Spot gold rose 1.2% to $1,993.09 an ounce, while US gold for April delivery closed up 2.4% to $1,995.9 an ounce.
The Fed raised interest rates by 0.25 percentage points but emphasized that it could end up raising rates.
Gold prices hit a one-year high in the first session of the week, surpassing the key $2,000 mark on safe-haven demand. The outlook remains positive if the Fed stops raising rates or a banking crisis occurs.
Goldman Sachs raised its 12-month gold price target to $2,050 an ounce from $1,950 an ounce.
Copper reaches 3-week high on USD drop and demand hopes
Copper prices rose to a three-week high on a weaker dollar as investors bet the Fed would stop raising interest rates and stronger demand from China.
Three-month copper on the London Metal Exchange (LME) rose 1.7% to $9,037.50 a tonne, having previously touched its highest since March 2 at $9,047.50 a tonne.
Strong seasonal demand is underpinned by predictions of a post-pandemic economic recovery in China, which accounts for half of global copper demand by an estimated 25 million tonnes this year.
Also supporting copper are worries about LME supply. This happened with spot copper being 6.5 USD/ton higher than 3-month copper for the first time since January.
Singapore iron ore reverses
Singapore iron ore prices reversed as steel demand was much weaker than expected.
Iron ore for April delivery on the Singapore Exchange fell 0.72% to 119.4 USD/ton.
At the Dalian Commodity Exchange, the May futures contract closed down 2.01% to 854 CNY ($125.25)/ton, continuing to depreciate for the fourth consecutive session and the lowest since January 14. 2.
Demand for construction steel products including rebar and coil fell 6.1 percent week-on-week to 4.53 million tonnes as of March 23, according to Reuters calculations based on data from consulting firm Mysteel. .
Prices of other steelmaking raw materials such as coking coal and coking coal also weakened. In Shanghai rebar fell 2.02% to CNY 4,070/ton, hot rolled coil decreased by 1.42%, coil decreased by 1.42% and stainless steel decreased by 0.98%.
Japanese rubber fell
Japanese rubber prices fell on a stronger JPY and falling oil prices, while investors braced for more volatility after Fed Chairman Jerome Powell said banking stress could trigger a crisis. Credit.
Rubber contract for August delivery on the Osaka exchange closed down 0.3 JPY or 0.2% to 204.1 JPY ($1.56)/kg.
On the Shanghai exchange, the May futures contract fell 15 yuan to 11,675 yuan ($1,711.43) per ton.
A Reuters survey showed major Japanese manufacturers remained pessimistic about business conditions for a third straight month in March, reflecting worries that slowing global growth could weigh on momentum. exports of this country.
India’s export rice prices fall
India’s export rice prices continued to fall this week after sluggish demand as buyers anticipating further price declines delayed purchases, while Vietnamese traders hoped for more competitive prices and daily supplies. increasing will attract more orders from large customers.
In India, the price of 5% broken parboiled rice was offered for sale at $380-385/ton, the lowest since mid-January, down from $382-387/ton a week ago.
An exporter based at Kakinada in the southern state of Andhra Pradesh said prices have adjusted by about $20/ton this month and all agricultural commodities have fallen over the past few days.
In Vietnam, the price of 5% broken rice was unchanged at $450/ton this week.
A trader in An Giang province said trading activity is sure to recover in the next few months due to increased supply from the current harvest and demand from traditional customers including China and the Philippines, in addition to the recent harvest season. Winter-spring harvest will end at the end of March.
Another person in Ho Chi Minh City said the price of Vietnamese rice will be lower than that of Thai rice, so some customers have moved to Vietnam.
In Thailand, the price of 5% broken rice increased to $465/ton from $455/ton a week ago. The strengthening of the country’s domestic currency makes export prices more expensive in USD terms.
Retreat path
White sugar for May futures closed down $6.1 or 1% at $597.8 a tonne after setting a six-month high at $608.1 a tonne.
Dealers say the fundamental picture remains bullish rather than bearish with many production questions from major Indian and Thai manufacturers unanswered.
Even so, trading group Czarnikow said it expected sugar production in Brazil to be 37.6 million tonnes this season, the second-highest on record.
Raw sugar for May delivery fell 0.25 US cents or 1.2% to 20.89 US cents/lb.
Mixed coffee
Robusta coffee for May delivery closed up $12 or 0.6% to $2,124 a tonne, the lowest price in more than a month on the first day of the week.
May Arabica coffee futures fell 3.7 US cents or 2.1% to $1,743/lb after falling to $1,739/lb, the lowest level since Feb. 9.
Coffee trading in Vietnam was low last week because of low stocks, while Indonesia is on holiday.
Farmers in the Central Highlands sold green coffee beans at VND 46,000 – 48,500 (USD 1.96 – USD 2.07)/kg, compared to VND 46,300 – 47,400 last week.
One trader said there were not many transactions in the market. It is very difficult to buy now or when both Indonesia and Vietnam do not have much coffee left.
Farmers sold most of their coffee and limited the sale of the rest.
Traders in Vietnam offer to sell grade 2 robusta coffee with 5% black and broken beans at a discount of 10 – 20 USD/ton compared to the May futures contract in London. The deduction a week ago was 0 – 20 USD/ton.
Corn, wheat reversed to close lower
Chicago corn prices reversed their gains initially to close lower, hitting their highest since February on demand from China. Wheat closed lower, pressured by disappointing export data. Soybean ended the session also down.
CBOT corn for May term closed down 1-3/4 US cents to 6.31-3/4 USD/bushel. The most traded contract hit $6.44/bushel this session, the highest since Feb. 28 due to sustained demand from China.
China bought an additional 123,000 tons of corn from the US, bringing the total exports to the country to more than 2.5 million tons.
CBOT soybean for May futures closed down 29 cents at $14.19-1/2 per bushel after falling to $14.15-1/4, the lowest since Nov. 18, 2022.
Winter soft red wheat fell 1-1/2 US cents to $6.62/bushel.
Prices of some key items on the morning of March 24:
Gold prices may soon conquer all-time highs, reaching $2,600/ounce
