Oil and gas swell due to production halt
Highlights:
- ENERGY:
Brent crude price advanced by $0.10 to $72.80. Meanwhile, the price of WTI added $0.30 to $68.44.
The natural gas was trading with an increase of 0.91% at $4.42 per mmBtu in New York. - METALS:
Spot gold dropped by 0.2% at $1,813.76 per ounce. Silver shed 0.2% to $23.95 per ounce.
On Comex, copper reached a one-and-a-half-week high of $4.32 per pound. - AGRICULTURAL:
Soybeans tumbled by 0.1% to $13.21-1/2 a bushel. Corn lost 0.6% to $5.50 a bushel.
Oil advanced due to supply disruptions
Brent crude price advanced by $0.10 to $72.80. Meanwhile, the price of WTI added $0.30 to $68.44.
On Friday, oil companies rushed to evacuate their employees from marine infrastructure ahead of Hurricane Ida, causing their Gulf facilities to close.
On Sunday, energy companies had evacuated 288 extraction platforms. It’s more than half of those found in the Gulf of Mexico.
Analysts said that the worst is past now for the offshore platforms. Now the crude markets shifted their focus back to the coronavirus and the OPEC+. Oil products prices are forecast to are forecast increase due to refinery interruptions.
OPEC+ to reconsider increased production
Kuwait’s oil minister Mohammed Abdullatif said that the increase in oil production agreed last month by the OPEC+ nations could be modified at their next meeting on September 1.
OPEC and its allies, including Russia, will meet on Wednesday to discuss the previously agreed increase of 400,000 barrels per day for the coming months.
According to Mohammed Abdullatif, the markets are slowing down. Since COVID-19 has entered its fourth wave in some areas, the cartel must be careful to reconsider this increase. The economies of the East Asian countries and China continue to be affected by COVID-19, so caution is necessary, the Kuwaiti minister added.
Natural gas rose to multi-year highs
The natural gas was trading with an increase of 0.91% at $4.42 per mmBtu in New York.
Natural gas futures advanced to multi-year highs on Friday. Weather radars showed Hurricane Ida appeared to be moving away from LNG export facilities, moving toward New Orleans.
The demand for LNG export from the US to Europe and Asia has been one of the factors that have driven the natural gas prices throughout the summer. The damage to the facilities would have blocked deliveries, affecting the price. Bullish natural gas traders would prefer LNG to continue to flow as much as possible to maintain the strength of exports.
Concern over LNG demand, which accounts for about 10% of total national consumption, was the factor that drove natural gas prices on Thursday and Friday.
Gold slipped following Powell’s speech
Gold slipped on Monday due to fears that tapering would dampen bullion’s safe-haven appeal.
Spot gold was down 0.2% at $1,813.76 per ounce, as of 0727 GMT.
Powell admitted that if the economy continued to evolve as expected, it would be convenient to start reducing the size of the monthly bond purchase program this year.
He added that after the meeting, the publication of the July employment report reflected the progress of the economy. However, the increase in cases of the Delta variant of Covid-19 represents a threat to the recovery.
In addition, he considers that the main inflationary pressures come from products whose production chains are affected by the pandemic. Although the central bank cannot be sure, it estimates that in the medium term, inflation will return to levels in line with the objectives of the Federal Reserve.
These statements do not provide a definitive signal about when it begins to make changes in monetary policy. It left investors attentive to the economic figures that will have the greatest influence on that decision: the employment report and inflation.
Avtar Sandu, a senior commodities manager at Phillip Futures, stated that the yellow metal prices would need to overcome $1,839 resistance.
As for silver, it dropped by 0.2% to $23.95 per ounce.
Meanwhile, Copper advanced after a US dollar slide which supported the red metal. On Comex, copper reached a one-and-a-half-week high of $4.32 per pound.
Corn and Soybeans fall after unexpected rains in the US
The price of soybeans operated mostly neutral after the declines of the last few days. The rains put pressure on prices. Soybeans tumbled by 0.1% to $13.21-1/2 a bushel.
The corn fell more than a dollar in Chicago. External sales remain robust and at a good pace, which boosts the market and underpins the increases. Corn lost 0.6% to $5.50 a bushel.
Withholdings of Russia, the world’s leading exporter, bring uncertainty to the market, as their level cannot be predicted given fluctuations in domestic prices.
