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Oil and gas slumped after IEA report

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Oil prices settled mixed ahead of OPEC+ meeting

Oil and gas slumped after IEA report

 

Highlights:

  • ENERGY:
    WTI crude oil for September delivery dropped by 16 cents to $69.09 a barrel Thursday. Brent crude oil for October delivery lost 13 cents to $71.31 a barrel.
  • METALS:
    Gold futures for December delivery traded at $1,720-$1,725, and silver December futures were between $22.50-$22.75.
    Copper Three-month copper on the LME climbed by 0.3% to $9,497.50 a tonne after strikes in Chilean copper mines.
  • AGRICULTURAL:
    September corn increased by 10¾¢ to close at $5.67 a bu. September soybeans were flat at $13.47 a bu.

Oil slipped after IEA warning about demand 

WTI crude oil for September delivery dropped by 16 cents to $69.09 a barrel Thursday. Brent crude oil for October delivery lost 13 cents to $71.31 a barrel.

Both benchmarks have been under pressure for the second consecutive session due to concerns that the delta variant of the coronavirus slows the recovery in demand. 

The trigger for this renewed concern has been a monthly report from the International Energy Agency. IEA warned that the growth in demand for crude oil and its products had slowed sharply, as the increase in Covid-19 cases all over the world forced governments to reactivate restrictions on movement.

On the other hand, the monthly OPEC report on Thursday showed that the producer group maintains its recent forecast of a rebound in global oil demand this year and further growth in 2022. Apparently, it is ignoring the rising concern about growing COVID-19 infections. 

The IEA said that the increase in demand for crude oil came to a halt in July. It is expected to increase at a slower pace during the rest of 2021 due to the rise in infections. After publishing the report, main banks also stated similar warnings. 

Goldman Sachs expects that the recovery in demand will advance along with the increase in vaccination rates.

 

The natural gas market is weakening on bearish news 

Natural gas futures were trading lower in New York after yesterday’s sharp drop. The catalyst behind the price decline is a bearish government report showing increased reserves on the high side of the projections. At the same time, cooler temperatures in the short term and weaker spot prices are weighing on gas value.

The weather forecast announcing massive rain in Florida due to Tropical Storm Fred has also added to the downward pressure. The storm will bring rain and winds that could lower temperatures and humidity in the region, leading to less demand for refrigeration.

According to the US EIA report on Thursday, national natural gas reserves increased by 49 billion cubic feet during the week ending August 6. The figure is much higher than last week’s number, which was 13,000 million cubic feet. 

 

Gold is still a precious asset for investment 

Gold futures for December delivery traded at $1,720-$1,725, and silver December futures were between $22.50-$22.75.

Despite the recent slump in yellow metal prices, some analysts still believe that gold has an opportunity to rise back to its record high by the end of 2021. 

The US government keeps pumping money into the economy, with inflation at high levels. Once these measures are exhausted, the government will be unable to issue debt and could run out of cash. 

So, there is still a lot of uncertainty in the market. Because of that, analysts believe that the precious metal is still in a decent place. 

cours du cuivre copper lundi 5 avril 2021

Copper prices increased after a strike in Chile

London Copper prices increased on Friday due to strikes in copper mines in Chile, which raised risks for supply disruption. 

Three-month copper on the LME climbed by 0.3% to $9,497.50 a tonne.

Meanwhile, the most-traded September copper contract on the Shanghai Futures Exchange slipped 0.5% to 69,870 yuan a tonne.

Workers at Chilean state company Codelco, the world’s largest copper producer, started a strike on August 12. Activities also stopped in another mine located in the north of the country. This situation occurs just when the union of workers at the Escondida copper mine, one of the largest deposits in the world, is holding negotiations with the Anglo-Australian company Bhp Billiton. 

According to Fitch Solutions, supply constraints in Chile, Peru, and China have tightened copper supply. It is supporting the red metal prices. 

 

The US will reap a record number of corn and soybean crops

According to the latest USDA estimations, the country will reap two of its largest-ever corn and soybean crops. The soybean crop is forecast to be 4.34 billion bushels, and the wheat crop will total 1.7 billion bushels.

If these forecasts proved accurate, the country would record the second-largest corn and the third-largest soybean crops.

 

September corn increased by 10¾¢ to close at $5.67 a bu. September soybeans were flat at $13.47 a bu. September soybean meal increased by $1.30 to settle at $355.20 a ton.

The post Oil and gas slumped after IEA report appeared first on FinanceBrokerage.

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