Oil increased
Oil prices rose in the last session of the week, reaching the highest level in a year and nearly 60 USD / barrel, due to the hope of economic recovery and the limited supply of OPEC +.
Oil prices were also supported as the US stock markets reached record highs due to signs of progress with a larger economic stimulus package, while the US job report showed that the labor market was stabilizing.
Closing the session on February 5, Brent crude rose 50 US cents or 0.9% to 59.34 USD / barrel after reaching the highest level since 20/2/2020 at 59.79 USD / barrel. WTI crude oil rose 62 cents or 1.1% to 56.85 USD / barrel, after reaching 57.29 USD, the highest since January 22, 2020. For the whole week, WTI crude oil increased by nearly 9%, the strongest percentage increase since October 2020. Brent crude oil is up about 6%.
The rollout of the Covid-19 vaccine has offered hope for demand-driven growth, but even the most optimistic organizations like OPEC do not expect oil consumption to return to pre-pandemic levels until 2022.
Aramco Oil Company raised the official selling price of Arab Light oil by 1.4 USD / barrel compared to the previous month for Northwest Europe. This could be a sign that Saudi Arabia is more confident in the demand outlook.
OPEC and its allies maintain a tight supply policy at the February 3 meeting. OPEC + ‘s record cuts have helped oil prices rise from their historic lows last year.
Also supporting this market is the weekly supply report showing that US crude inventories fell to their lowest level since March 2020.
US oil rigs, an early indicator of future output, rose for the fifth consecutive month, according to energy services firm Baker Hughes. In the last week, it increased 4 rigs to 299 rigs, the highest since May 2020.
Asian LNG prices fell for the third consecutive week
Spot liquefied natural gas (LNG) prices fell for the third consecutive week due to warming weather in the northern hemisphere, reducing heating demand.
Average LNG price delivered in March to Northeast Asia is estimated at 7.2 USD / mmBtu, down 80 US cent from last week.
Temperatures in Tokyo and Shanghai, in the world’s two largest LNG consuming countries, are expected to rise slightly above historical average over the next two weeks.
Gold increased due to USD regression
Gold prices rebounded above the psychological threshold of $ 1,800, as USD retreated and data show lower than expected US job growth as a basis for the need for additional financial support.
Daily delivery gold increased 1% to 1,810.26 USD / ounce, after falling to its lowest level since December 1, 2020. US gold futures in April closed up 1.2% to $ 1,813 per ounce. For the whole week, gold prices fell 1.9%, the strongest drop since the end of the week on January 8, partly due to the increase in US Treasury bond yields.
USD fell 0.6% making gold cheaper for holders of other currencies.
The US House of Representatives will formally pass a budget measure next Friday that will allow Democrats to push the $ 1.9 trillion bailout package through Congress. Gold is seen as a measure against inflation and currency devaluation can be appreciated by economic stimulus.
Copper price increases
Copper prices rose as the dollar weakened and hope for better demand for metals due to improved vaccine deployment and possible US stimulus measures.
Copper for 3 months on London Metal Exchange (LME) rose 1.9% to $ 7,970 / ton. The metal, used in the electrical and construction industries, is up about 1% this week.
Global copper inventories are at their lowest level since 2008 despite the approaching Chinese New Year holiday, as inventories are often increased because demand falls.
Total copper inventories on the LME trading floor reached 76,550 tons, less than half of the level of October 2020.
Spot price of LME copper was higher than copper for delivery after 3 months to 14.5 USD / ton, signs of scarce supply in the short term.
Chinese iron ore rises
Chinese iron ore prices hit a one-week high on expectations of improved demand after the Lunar New Year holiday.
Iron ore on the Dalian commodity trading floor closed up 4.2% to 1,004.5 CNY (155.16 USD) / ton, previously the price reached 1,017 CNY / ton, the highest one week. For the whole week, iron ore prices rose 1.4% after falling for 3 consecutive weeks.
According to the consulting firm SteelHome, spot iron ore prices increased to 157 USD / ton on 4/2.
Asian iron ore markets could be quiet over the next two weeks, with investors expected to be absent from the one-week Chinese New Year holiday starting Feb. 11.
Iron ore prices fell 0.4% on the Singapore exchange, due to concerns about China’s control of Covid-19, which could delay construction workers’ return to work after Tet.
Steel bar in Shanghai rose 1.6%, HR coil increased by 2% and stainless steel by 0.2%.
Rubber price increases
Japanese rubber prices followed Shanghai’s trend after Chinese authorities reported the number of new Covid-19 infections at their lowest level in more than a month, showing that the latest viral outbreak is easing.
July rubber contract on Osaka trading floor closed up 5.8 JPY or 2.5% to 239.5 JPY (2.27 USD) / kg.
Price of rubber delivered in May in Shanghai increased 295 CNY to 14,730 CNY (2,276.59 USD) / ton.
White sugar hit a 4-year high
White sugar futures in March closed up 9.4 USD or 2% to 474.8 USD / ton, the highest level for contracts delivered next month since April 2017.
Dealers note there is a significant interest in delivering sugar when the March contract expires next Friday. This is due to a tight spot market combined with a shortage of containers in many countries such as India.
Raw sugar futures in March increased 0.37 US cents or 2.3% to 16.42 US cents / lb.
Coffee is mixed
Arabica coffee term in March closed up 0.45 US cent or 0.6% to 1,245 USD / lb.
Robusta coffee prices for the same period fell 3 USD or 0.2% to 1,340 USD / ton.
Reduced soybeans
Soybean prices on the Chicago exchange closed down.
CBOT soybean futures in March closed down 5-3 / 4 US cents to 13.66-3 / 4 USD / bushel. For the whole week, the soybean contract fell 3-1 / 4 US cents or 0.2% from the previous week.
Soybean meal for the same period fell 2.6 USD to 430.5 USD / ton US.
Traders predict limited US soybean stocks as announced by the USDA in their supply and demand report on Tuesday.
The US exported $ 28.75 billion of goods and related agricultural products to China in 2020, lower than the target of $ 36.5 billion in phase 1 of the trade agreement.
Prices of some key commodities in the morning of February 6
