US oil closes below $100/barrel
WTI oil prices closed below $100 a barrel, to a two-week low as demand outlook was pressured by China’s lockdown and growing recession risks, while a strong dollar made oil more expensive. to buyers in other currencies.
Closing session 10/5, WTI crude oil fell $3.33 or 3.2% to $99.76/barrel, while Brent fell $3.48 or 3.28% to $102.46/barrel. Both of these oils fell for the second straight session.
Wall Street’s main indexes also fell in a volatile session on concerns about aggressive monetary policy tightening and slowing economic growth.
In the early trading session, comments from the energy ministers of Saudi Arabia and the UAE boosted Brent and WTI crude oil by more than 1 USD / barrel.
The European Union Commission needs consensus to ban oil imports from Russia, France’s minister said EU members could reach an agreement this week but Hungary has staunchly opposed the embargo.
In addition to the recent G7 ban on oil imports from Russia, Japan (which got 4% of its oil imports from Russia last year) has agreed to phase out these transactions. The timing and method are yet to be decided.
On the supply side, the US Energy Information Administration has reduced its forecast for US oil production for 2022 and 2023. It now expects 2022 production to average 11.9 million bpd above its estimate. 12 million bpd previously.
In the US, inventories of crude oil, distillates and gasoline are likely to fall this week, according to a preliminary Reuters poll.
European refinery inventories of crude oil and oil products stood at 1 billion barrels in April, down 10.3% year-on-year but close to March levels.
Gold fell
Gold prices reversed and fell as the dollar regained strength, while investors turned their attention to US inflation data for clues on the Federal Reserve’s monetary policy strategy.
Spot gold fell 0.5% to $1,844.95 an ounce, after gaining about 0.6% earlier in the session. US gold for June futures closed down 1% at $1,841 an ounce.
The dollar index rose 0.2 percent, near a 20-year high reached in the previous session. Meanwhile, the 10-year US Treasury yields retreated from 4-year highs.
Investors await the US consumer price index (CPI) data to gauge its impact on the Fed’s plan to raise interest rates.
Gold is seen as a hedge against inflation and uncertain economic conditions. However, the price of gold is very sensitive to rising US interest rates.
Aluminum drops to 5-month low
Aluminum prices fell to near five-month lows as hedge funds fell on slowing selling demand, but worries about production cuts in Europe as high energy costs are expected to supply grant some support.
Aluminum on the London Metal Exchange closed at $2,757 a tonne after hitting its lowest since December 21, 2021 at $2,697.5 a tonne earlier in this session.
But risks to aluminum supply still increase, with the risk of shutting down production with about 1.5 to 2 million tons across Europe and Russia in the next 3 to 12 months. This output accounts for about 2% of the global aluminum supply estimated at 70 million tonnes this year.
Data on China’s loans and gross social finances, a key gauge of industrial metal consumption, released in the next few days will provide clues to the demand outlook. China is the world’s largest aluminum producer and consumer.
Also putting pressure on industrial metals is the US interest rate hike, causing the USD to appreciate.
China iron ore lowest in nearly 2 months
China’s iron ore prices fell as much as 7% to their lowest in nearly two months, on concerns about rising interest rates and sluggish domestic demand.
The US Federal Reserve raised interest rates by half a percentage point last week and said it could raise interest rates in the next two to three meetings and then assess how the economy and inflation are reacting before deciding. determine whether further increases are needed.
Meanwhile, low margins for steelmakers and overall steel output control have limited production ramping up and reduced demand for steelmaking components.
Iron ore for September delivery on the Dalian Commodity Exchange fell about 7 percent to 756 yuan ($112.71) a tonne, the lowest since March 16. At the close, iron ore fell 4.1% to CNY 779/ton, down for the third day in a row.
On the Singapore Exchange, iron ore futures in June fell 3.1% to 123.45 USD/ton.
Steel prices in Shanghai also fell, with October rebar down 1.5% to CNY4,607/mt and hot-rolled coil down 1.7% to CNY4,698/mt.
On May 9, China’s central bank said it would step up support for a slowing economy, while closely monitoring domestic inflation and monitoring the policy adjustment of other economies. economic development.
Japanese rubber lowest 7.5 weeks
Japanese rubber prices fell to a 7.5-week low, as the Tokyo stock market and weak domestic economic data weighed on sentiment.
The October rubber contract on the Osaka exchange closed down 3.3 yen, or 1.3%, at 248.2 yen ($1.91) per kilogram, after hitting its lowest level since January 18. 3 at 245.6 JPY.
Japan’s consumer spending fell in March for the first time in three months, although it fell less than expected as consumers remained wary of rising costs of living despite some Covid-19 restrictions. is being loosened.
The September rubber contract in Shanghai rose 150 CNY to 12,765 CNY ($1,898.40)/ton. Prices in Shanghai rose on recovery from previous session lows.
Sugar falls on surplus outlook
Raw sugar for July delivery fell 0.12 US cents, or 0.6%, to 18.54 US cents/lb, after hitting its lowest since March 16 at 18.51 US cents.
Dealers said the outlook turned negative for futures prices due to increased production, but sugar could find support from end users at 18.5 US cents/lb.
The market is expected to have a surplus of 4.1 million tonnes in the new crop year starting in October.
Brazil’s UNICA organization said the country’s sugar production reached 934,000 tons in the second half of April, down 38.7 percent year-on-year, but above market forecasts.
White sugar for August futures lost $3.1 or 0.6% to $518.3/ton.
The lowest price of Arabica coffee in 6 months
July Arabica coffee futures fell 2.3 US cents or 1.1% to $2,038/lb after falling to a six-month low at $2,023.
Dealers cited worries about monetary tightening by major central banks and a related slowdown in growth.
They noted that the dollar’s rise against major currencies including the Brazilian real encouraged exporters to sell.
Robusta coffee futures in July closed down 11 USD or 0.5% to 2,009 USD/ton, having previously hit an 8-month low at 2,004 USD/ton.
Soybean, corn increase
Chicago soybeans rose, after a day of declines driven by macroeconomic worries.
The market focused on the US Department of Agriculture’s global crop report released on May 12. This report will include the first full outlooks for the 2022/23 crop year, as well as an assessment of Ukraine’s exports and production in severely drought-stricken regions such as Brazil and the European Union.
CBOT soybeans rose 7 US cents to 15.92-1/4 USD/bushel.
CBOT corn rose 3-1/4 US cents to $7.75-1/4 USD/bushel while July wheat futures closed flat at 10.92-3/4 USD/bushel.
Both corn and soybeans rose from multi-week lows hit in the previous session as they were pressured by falling crude oil prices and improving plantings across the Midwest.
Prices of some key items on the morning of May 11:
