Oil and Gas on the Rise, but Gold Fell
Crude oil prices recovered after Monday’s slump. Brent and WTI futures added 0.1%, both.
Natural gas gained momentum because of hot weather conditions in the US.
Gold traded with a loss, registering an almost 8% slump in June.
Silver gained 0.28%.
Copper added 0.38%.
Corn, Soybeans, and wheat futures declined because of expectations of production increase.
Oil recovered after yesterday’s slip
Crude oil has recovered during Tuesday’s session after a crash on Monday.
WTI futures settled with an increase of 0.1%, or 7 cents, at $72.98 a barrel, after a 1.5% retreat on Monday. Meanwhile, Brent crude also advanced by 0.1%, or 8 cents, at$74.76 a barrel, having sunk by 2% on Monday.
Oil demand was expected to increase by 6 million barrels per day. However, the new Delta variant of the coronavirus pandemic has caused new restrictions in many regions.
On June 1, OPEC and its allies agreed to gradually ease output cuts.
In April, the original plan was to return 2.1 million barrels per day to the market between May and July 2021. OPEC Secretary-General Mohammad Barkindo stated that oil demand is still forecast to increase despite uncertainties and associated risks.
The OPEC+ group will meet again on July 1 to generate a plan for future production policy. In response to demand, OPEC+ is expected to ease production cuts gradually.
So far, in 2021, oil prices have advanced more than 30%.
The organization announced massive crude production cuts in 2020 to maintain prices during the COVID-19 pandemic.
Scorching summer boosts gas prices for the 6th consecutive day
Natural gas futures have risen to the highest level in recent years at the start of the session on Tuesday but then fell back into the mid-session. However, they posted an advance for the sixth consecutive day. The gas prices have climbed by 24.48% in June on the MCX and reached a high of $3.81/mmBtu on NYMEX.
On the MCX, natural gas delivery for July rose by Rs 3.40, or 1.25%, to Rs 276.20 per mmBtu.
Gas delivery for August gained Rs 3.40, or 1.25%, to Rs 275.10 per mmBtu.
Advances in the commodity’s prices have resulted from scorching summer in some parts of the US. NetGasWeather projected hot conditions for the next few days, which will gain intensity over the south, central and eastern parts of the country.
Some analysts believe that price increases for gas will be short-lived, and the prices can move in both directions.
Gold experienced the biggest monthly slip in over four years
Gold prices were trading sharply lower after the US consumer confidence index recorded better-than-expected results in June.
On MCX, August gold contracts were trading with a drop of 0.03% at Rs 46,543 for 10 grams.
Moreover, spot gold was steady in the international market, trading at $1,761.80 an ounce. US gold futures dropped by 0.1% to $1,761.80.
The yellow metal is getting ready to close the month, with the biggest fall accumulated in more than four years.
US monetary policy supported the dollar, an active refugee competitor to the precious metal, and pushed gold down.
Gold prices slipped by nearly 8% in June.
Silver gained on a solid spot demand
Silver is trading with an increase of 0.28%, at $25.81/oz after yesterday’s drop. Market participants betted on a solid spot demand. Analysts believe that it was the reason for the rise in silver prices.
Copper added 0.38%
Copper prices also hiked due to the spot demand. The red metal futures contracts for July advanced by 0.38% to Rs 719.45 per kg on the Multi Commodity Exchange.
Corn, Soybean, and Wheat futures slid on higher output expectations
Chicago corn and soybean futures slid on Wednesday since traders changed positions ahead of the US Department of Agriculture’s report on stock and acreage.
After a hot and dry beginning to June in the US, corn and soybean fields experienced much more favorable weather last week.
The most active corn contract on the CBOT slumped by 1.8% to $5.38-3/4 a bushel. Meanwhile, soybeans dropped by 0.6% to $13.04-3/4 a bushel.
The USDA is forecast to increase its estimate for corn plantings by nearly 3% from March. As for Soybean plantings, they are expected to rise by 1.5% from March.
However, fears remain that hot and dry weather may affect grain production.
Wheat decreased by 0.5% at $6.42-3/4 a bushel. On Tuesday, IKAR, a Russian agriculture consultancy, stated it had increased its 2021 forecast for the wheat crop to 83.6 million tonnes from 82 million tonnes. Besides, it expects Russia’s exports of wheat to be equal to 39 million tonnes this year.
Wheat futures sank on expectations of higher production in Russia, the world’s biggest exporter.
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