Global Rebound Meets Shortage in Energy Commodities

Highlights:

• ENERGY:
• Brent crude oil was trading with an increase of 1.3% or $1.7 at $82.33 a barrel. Meanwhile, the WTI advanced by 1.2% or 89 cents to $78.51.
  Natural gas momentarily reached the level of $6 again on Monday.
• METALS:
  Gold futures for December were trading with a rise of $11.00 at $1,769.40. Meanwhile, December silver futures slipped by $0.129 at $22.665 an ounce.
  Three-month copper lost 0.9% to $9,167 a tonne.
• AGRICULTURAL:
  Soybean traded at $453.4, while corn stood at $211.1.
  

Oil hit three-year-old high

Brent crude oil was trading with an increase of 1.3% or $1.7 at $82.33 a barrel. Meanwhile, the WTI advanced by 1.2% or 89 cents to $78.51.

Oil prices have climbed by more than 50% this year. 

Analysts think that crude oil is going through a very bullish moment, and it is reasonable to wait for some setback to try to buy at more attractive levels. Volatility will continue to be the factor that drives the market.

OPEC and its allies held a meeting on Monday and decided to stick to an existing agreement for a gradual increase in crude oil output. 

Russian Deputy Prime Minister Alexander Novak stated that the group would be monitoring the situation as demand typically drops in the fourth quarter. 

OPEC+ agreed to boost production by 400,000 BPD a month in July to recover existing production cuts. Demand swiftly recovered. However, hurricanes and low levels of investment disrupted the demand.

At the same time, US crude oil inventories last week are forecast to have fallen. According to a Reuters survey, crude inventories are likely to have declined about 300,000 barrels in the week ending October 1. 

Supply concerns boost natural gas prices

European natural gas prices soared because of supply concerns. These increases are hitting industrial production. Some companies in Europe were forced to decrease the output. 

The IEA believes that the prices will begin to fall in the second quarter of 2022. 

The agency stated that the year 2021/22 started October with record spot gas prices in Europe and Asia. Meanwhile, inventory levels are lower than average for the upcoming heating season.

The arrival of winter in the northern hemisphere will keep demand strong due to the need to use gas for heating. So, prices will remain high during the cold season. 

The decline in prices from the second quarter of 2022 will likely end a condition of high prices and limited supply.

Gold loses weekly gains; silver remains firm

Gold markets have dropped significantly during the trading session on Monday. They only recovered losses later on in the day. The yellow metal even exceeded the level of $1770. Analysts believe that there will be a lot of resistance above that level. 

Gold lost this week’s 2.4% gain in the London market to $1705 per ounce. Meanwhile, silver held firm.

So far this year, gold price in dollars has plunged by 10.3%, and silver has lost 3.8%.

Gold futures for December were trading with a rise of $11.00 at $1,769.40. Meanwhile, December silver futures slipped by $0.129 at $22.665 an ounce.

Russia may run out of gold in 20 years

Russia is one of the world’s largest gold producers and the country with the largest reserves of precious metals. However, Polyus, a Russian Gold mining company, stated that gold reserves might be exhausted in around 20 years considering the pace they are being mined. 

According to the data provided by the CEO of Polyus, the current gold deposits in Russia are equivalent to about 8,000 tons, which are mined at an annual rate of about 330 tons. 

The exhaustion rate of mineral resources in the country has progressively increased in recent years, falling from 62 to 30%. According to Pavel Grachev, CEO of Polyus, the industry is witnessing a reduction in metal concentration.

The solution is to increase investment in geological exploration. However, it faces a series of obstacles, such as the scarcity of resources and some legal restrictions.

Dollar rise weighed on copper prices

Copper prices in London dipped due to dollar strength. 

Three-month copper lost 0.9% to $9,167 a tonne.

The rise in the US dollar makes dollar-priced metals more expensive for other currency holders. 

Corn futures trade at a loss

Soybean futures started trading in the mixed ground. Meanwhile, the US harvest advanced above expectations, limiting the increases. 

In addition, the commercial tensions between the United States and China are added due to the accusations of the violation of the Phase 1 agreement. It also impacts the prices. Soybean traded at $453.4.

Corn started the day with losses of more than two dollars. According to the FYO report, corn futures are pressured by the advance of the US harvest, which already reached 29%. Corn was trading at $211.1.