Natural Gas Saw a Boost, While Oil Slipped

Highlights:

• ENERGY:
  Crude oil registered the second consecutive day of losses. WTI slipped by 1.62% at $72.75 a barrel while Brent oil lost 1.38% at $74.37.
  On the MCX, natural gas futures for August delivery increased by Rs7, or 2.41%, to Rs 297 per mmBtu.
• METALS:
  Gold declined by 0.4% to $1,806.90 an ounce.
  Silver lost 0.4% to $25.37 per ounce.
  Meanwhile, Copper rebounded by 0.6% to $9,782 a tonne.
• AGRICULTURAL:
  Corn and soybeans prices were hit by the weather forecasts. Soybeans slipped by 0.5% to $13.41-3/4 a bushel on Friday while corn dropped by 0.4% to $5.43 a bushel.
  

Crude Oil Fell On Demand Concerns

Oil registered a strong rebound last week, but the movement did not reach the highs recorded at the beginning of July.

Crude oil traded with losses today. WTI crude slipped by 1.62% this morning and traded at $72.75 a barrel in futures contracts for September.

Brent crude lost 1.38%, and a barrel traded at $74.37 in the contracts for October.

Meanwhile, OPEC reported that its crude oil basket closed Friday at $74.98 a barrel, compared to $74.42 on Thursday, representing an increase of 0.75%.

In the last two weeks, bullish traders have been operating under the premise that demand would continue to exceed supply until the end of the year. These traders essentially believe that the vaccination rate will exceed the spread of the new Delta variant of COVID-19.

There has been no supply/demand report or economic data to oppose this idea. However, we have already seen an increase in infections for a whole month. Therefore, the impact of the rapid spread of the virus could begin to be reflected in the figures. 

Natural gas prices increased on tight supply

Natural gas futures were volatile last week. Initially, the expiration of the August futures contract, strong demand for cooling and gas exports pushed the prices higher. Still, it turned lower at the weekly close as weather forecasts predicted a decline in demand for the week.

However, this weakness was short-lived as predictions herald the return of sweltering heat before mid-August. 

On the MCX, natural gas futures for August delivery added Rs7, or 2.41%, to Rs 297 per mmBtu.

September gas delivery futures gained 2.26% or Rs 6.60 to Rs 298.10 per mmBtu. 

Gold fell due to improved appetite for risky assets

Gold’s trend reversed on Friday. The yellow metal lost $16.00 due to a lack of interest in markets in general.

The price of gold resumed its decline on Monday. Investor attention became focused on an employment report to be published later in the week to gauge the labour market’s health.

Spot gold traded with a drop of 0.4% to $1,806.90 an ounce. Meanwhile, US gold futures slipped by 0.4% to $1,810.10. 

In the event of a stronger-than-expected July non-farm payroll report, investors could assume that the Federal Reserve could be forced to reduce its stimulus measures earlier than expected. 

Silver is trading in a tight range

Silver has no interest now, and the trading range is as tight as it’s ever been. 

Results show that silver dropped by 0.4% to $25.37 per ounce.

In India, the white metal slipped by 0.2% to ₹67705 per kg. In the previous session, silver rates declined by 0.5%. 

Copper price rises on weak dollar

Copper prices rebounded on Monday, driven by a weaker dollar. On the other hand, after prospects for a strike in Chile, the biggest copper producer, and weak numbers in factories, there have been hopes for more stimulus in China.

Three-month copper on the London Metal Exchange advanced by 0.6% to $9,782 a tonne after falling 1% on Friday.

According to the official PMI index, in July, China’s manufacturing activity grew at its slowest pace in 17 months.

According to Gianclaudio Torlizzi of T- Commodity, the expectation of a more flexible fiscal policy in China is supporting copper. He added that the outlook for base metals is bullish in August. They are supported by the weaker dollar and the Fed stance. 

Corn and soybean prices dropped 

Chicago corn and soybean futures slid due to forecasts for rain in some parts of the US midwest. This could boost crops. 

However, the market is still cautious since it looks for more evidence of improved crop output.

Chicago Board of Trade most-active soybeans slipped by 0.5% to $13.41-3/4 a bushel on Friday.

Meanwhile, corn dropped by 0.4% to $5.43 a bushel.

On Monday, the US Department of Agriculture will publish a weekly report on US crop conditions. Traders are waiting on the data for the future direction of prices.

Brazilian farmers are inclined to extend their soybean area because of strong demand.