Oil peaks in 7 years
Oil prices rose to their highest in more than seven years and posted a sixth straight weekly gain as geopolitical uncertainty exacerbated concerns about tight energy supplies.
Closing session on January 28, Brent crude oil gained 69 US cents to 90.03 USD/barrel after reaching 91.7 USD/barrel, the highest since October 2014. WTI crude rose 21 cents to $86.82 a barrel after hitting a seven-year high at $88.84 a barrel.
The major OPEC+ producers have struggled to raise their output. The market also reacted to attacks on the UAE by the Yemeni Houthi group.
Oil prices were supported by concerns about a possible military conflict in Ukraine, which could disrupt energy markets, especially natural gas supplies to Europe.
In the beginning of the session, oil prices briefly turned down.
US oil production is difficult to increase even as the number of rigs is increasing. In terms of China’s crude oil import demand, the world’s biggest oil importer is likely to grow by about 7% this year.
Gold has the biggest weekly loss since November 2021
Gold prices continued to decline and set for their biggest weekly loss since late November 2021 as growing anticipation of a US interest rate hike sent the dollar to multi-month highs.
Spot gold fell 0.6 percent to $1,785.71 an ounce. In this session, the price fell to 1,779.2 USD, the lowest level in 6 weeks and the whole week fell about 2.5%. US gold for February futures fell 0.5% to $1,786.6 an ounce.
Gold prices fell below their 100- and 200-day averages in the previous session, after the US Federal Reserve reaffirmed the end of its pandemic bond-buying program and will raise interest rates in March.
The World Gold Council (WGC) forecasts that demand for jewelry, ingots and gold coins will remain strong in 2022 which may limit the decline in gold prices. The WGC also predicts central banks will continue to buy gold but at a slower pace.
Copper has the biggest weekly loss since October 2021
Copper prices are headed for their biggest weekly loss since October 2021 as the prospect of central banks tightening monetary policy dampens investors’ demand for risk assets and boosts the dollar’s value.
The dollar hit its highest level against a basket of major currencies since June 2021, making metals more expensive for buyers in other currencies.
Three-month copper on the London Metal Exchange (LME) fell 2.8% to $9,508 a tonne, down about 4.5% this week.
Copper prices hit a record high of $10,747.5 per tonne but then fell due to worries about economic growth, especially in China, the world’s top consumer.
Weak prices could extend through China’s Lunar New Year next week, according to Saxo Bank analyst Ole Hansen. However, the long-term outlook remains positive, with a global shift from fossil fuels to copper-intensive electrification likely to stimulate demand.
Plans to support China’s slowing economy with infrastructure spending will face setbacks, economists and policymakers say.
UBS analysts said they expect industrial metals prices to rise about 10-15% this year, but a poll of 25 analysts by Reuters showed copper prices are expected to average $9,370 a tonne. in the year 2022.
Dalian iron ore highest in 5 months
Dalian iron ore rose more than 7% in the last session of the week and posted its biggest weekly gain since mid-December, driven by a combination of hopes that China’s deepening monetary policy easing will stimulate demand. demand and fears about the prospect of a tight supply.
Iron ore contract for May futures on the Dalian Commodity Exchange closed up 7.6% to 829 CNY/ton, previously touching 830 CNY/ton, the highest since August 31, 2021.
Iron ore for March delivery in Singapore rose about 7% to $147.25 per tonne.
The uptrend is steady with both of these markets even as some investors stay on the sidelines ahead of the Lunar New Year holiday.
Spot prices also surged, with 62% Fe iron ore rising to $140 a tonne, the highest since September 3, 2021, according to data from consulting firm SteelHome.
Despite China’s ambitious low-carbon target, President Xi Jinping has said reducing emissions is not reducing production and it is not zero emissions.
Bar steel in Shanghai increased by 2.8%, hot rolled coil increased by 2.7%. Stainless steel rose 0.7%.
Japanese rubber increased
Japanese rubber girls rose as the JPY fell against the USD, support also came from the recovery of Shanghai rubber from 2.5-month lows.
The July rubber contract on the Osaka exchange closed up 2.9 yen, or 1.2 percent, to 239.4 yen ($2.07) per kilogram after falling to a 4.5-week low. at 232 JPY. Rubber had a 2nd consecutive week of decline with a 2% drop amid concerns that US interest rate hikes could slow down the global economic recovery.
Rubber in Shanghai for May term fell by 100 yuan, or 0.7%, to 14,150 yuan ($2,223) a tonne. Previously, the price had reached 13,860 CNY, the lowest since November 10, 2021.
Rubber stocks of the Shanghai exchange increased by 0.8% from a week ago.
Soybean, wheat, corn increase
Soybeans rose to their highest level since last summer, as the market expected drought damage in South America that could limit global export supplies.
Wheat rose after two days of declines, attracting bargain hunting as investors closely watched turmoil between Russia and the West over Ukraine. Corn is also supported by a strong crude oil market.
The CBOT soybean contract closed up 21-3/4 US cents to $14.7/bushel, previously reaching $14.79/bushel, the highest since June 15, 2021.
CBOT corn rose 10-3/4 US cents to $6.36/bushel, while CBOT wheat rose 9-1/4 US cents to 7.86-1/4 USD/bushel.
Falling line
Raw sugar for March delivery closed down 0.21 US cents at 18.20 US cents/lb after hitting a two-week low at 18.09 US cents.
Dealers say rain forecast over the weekend in Brazil’s south-central region could support soil moisture and this year’s sugarcane crop outlook.
An improved Indian output outlook has also weighed on the market’s recent weakness.
March white sugar futures fell 4.5 USD to 495.2 USD/ton.
Coffee rose
Arabica coffee for March delivery closed up 3.85 US cents to 2,359 USD/lb.
Dealers said the market remained focused on the outlook for this year’s crop in Brazil and the extent of the impact of frost and drought on yields.
Robusta coffee in March increased by 2 USD to 2,193 USD/ton.
Prices of some key items on the morning of January 29:
