Market on January 27: Oil price is getting closer and closer to 90 USD/barrel, arabica up nearly 3%, gold down

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Oil up nearly 2%

Oil prices rose about 2% on anticipation of stronger global demand as China reopens its economy and on positive US economic data.

Closing the session on January 26, Brent crude oil gained 1.35 USD or 1.6% to 87.47 USD/barrel, while WTI oil increased 86 US cents or 1.1% to 81.01 USD/barrel.

The US economy grew faster than expected in the fourth quarter of 2022, but a measure of domestic demand grew at its slowest pace in 2.5 years reflecting higher borrowing costs.

U.S. crude inventories rose by 533,000 barrels to 448.5 million barrels for the week ended Jan. 20, according to the US Energy Information Administration. The data came in short of forecasts for a 1 million-barrel increase, although the EIA said crude inventories were at their highest levels since June 2021.

China is easing strict Covid-19 restrictions this month, Beijing reopening its borders for the first time in three years.

The OPEC+ Council of Ministers meeting on February 1 could recommend the organization’s current production levels.

Global economic growth is forecast to be difficult to surpass 2% this year, according to a Reuters poll of economists, suggesting it could fall further. That contrasts with the optimism that has spread across the markets since the start of the year.

Gold fell

Gold prices fell on the back of a stronger dollar and strong US economic data that could prompt the Federal Reserve to keep raising interest rates for longer.

Spot gold fell 0.8 percent to $1,931.37 an ounce, after falling to $1,918.49. Prices also hit their highest since April 2022 at $1,949.09 per ounce in early trading.

US gold for February futures closed down 0.7% at $1,930 an ounce.

The US economy maintained a strong growth rate in the fourth quarter of 2022 as consumers increased spending on goods, but the momentum slowed down significantly at the end of the year.

The USD index rose 0.2%, making gold less attractive to buyers in other currencies.

Initial jobless claims also fell more than expected, signaling a better labor market.

Copper rose slightly

Copper prices rose on supply concerns but gains were limited by a weeklong Chinese New Year holiday, which dampened market activity and metal demand.

A weak dollar and hopes of stronger Chinese demand after the country abandoned its zero Covid policy have pushed copper prices up more than 20 percent since November, but prices have barely risen since the Chinese markets. Country closed.

Three-month copper on the London Metal Exchange (LME) rose 0.5% to $9,358 a tonne. Trading was weak as markets in India and Australia as well as China were closed.

Fears of supply disruptions in the world’s top copper producers Chile and Peru have added to concerns that extra demand from China’s reopening could strain already tight markets. .

Freeport-McMoRan Inc, which operates seven mines in the US, also warned that difficulty finding workers is limiting copper output.

However, Chilean company Cochilco predicts a global surplus of 160,000 tons of copper in 2023 and 360,000 tons in 2024 while raising their copper price forecast for 2023 to $3.85/lb (about $8,490/lb). ton).

Japanese rubber continues to increase

Japanese rubber prices continued to rise to the highest level in more than 3 months, on hopes of an economic recovery in China.

However, trading volume is still low due to Chinese New Year holiday.

The July rubber contract on the Osaka exchange closed up 1 JPY, or 0.4%, to 236 JPY ($1.82)/kg, the highest since October 11, 2022.

Japan cut its outlook on the overall economy for the first time in 11 months in January, as China’s Covid-19 contagion and slowing tech and semiconductor demand hit exports especially. to Asia.

Competitive Indian rice prices stimulate demand

Rice export prices from India held at a nearly two-year high for the second week in a row, driven by strong demand as local dealers continued to supply rice at more competitive prices compared to central Asia. Other Asia.

In India, 5% broken parboiled rice was offered at $387 to $395/ton this week, unchanged from last week.

An exporter in Mumbai said customers are looking for cheaper Indian rice compared to other countries despite recent price increases.

Supplies in India are also scarce after New Delhi decided to end its Covid-19 free food program and replace it with a cheaper scheme.

In Thailand, the price of 5% broken rice was offered at $500/ton, the same price last week and the highest since March 2021. Traders attributed the increase in rice prices to the strong baht. Last week, the Thai Rice Exporters Association reduced its 2023 rice export target to 7.5 million tons from 8 million tons due to the strengthening baht.

Markets in Vietnam are still closed for Tet holiday this week. Last week, Vietnam’s 5% broken rice was offered for sale at $445-450/ton.

The highest path in a month

Raw sugar for March delivery closed up 0.57 US cents, or 2.8%, to 20.68 US cents/lb, rising to 20.85 US cents this session.

Dealers note that few are willing to sell and with sugar closing above 20 US cents on Jan. 25, technical impetus should push prices higher in the short term.

Sugar is also supported by widespread anticipation that the Indian government will endorse a ban on exports of extra sugar this season.

Sugarcane production in south-central Brazil totaled just 440,000 tonnes in the first half of January, as only a handful of mills continued to operate during the mid-harvest period.

March white sugar futures rose $8, or 1.5%, to $555 a tonne.

Arabica coffee up nearly 3%

Arabica coffee for March delivery closed up 4.7 US cents or 2.9% at $1.6715/lb, hitting a three-week high at $1.6775.

Prices have returned to the upside in the past few weeks after hitting a 1.5-year low at $1,4305 on Jan.

Stocks of ICE certified coffee increased slightly to 870,722 bags.

Robusta coffee for May futures rose $23 or 1.2% to $1,962 a tonne.

Corn up 1.1%, soybean highest in a week

Corn prices on the Chicago Mercantile Exchange rose, on strong US exports and concerns about global supply.

The March corn contract on the Chicago Mercantile Exchange closed up 7-3/4 US cents to 6.82-1/2 USD/bushel.

Soybeans rose 1.4% to a one-week high on strong export reports.

Soybean meal and soybean oil also rose, with soybean oil recovering from a 6-week low.

March CBOT soybeans closed up 21 cents at $15.23-1/2 per bushel, above the 10-day average.

Wheat gains were supported by signs of increased demand for seaborne exports and fears of shortages due to the Russia-Ukraine conflict.

Winter soft red wheat on the Chicago Mercantile Exchange rose 11-1/4 US cents to 7.52-1/2 USD/bushel.

Prices of some key items in the morning of January 27

Market on January 27: Oil price is getting closer and closer to 90 USD/barrel, arabica increased by nearly 3%, gold decreased - Photo 1.

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