Brent Crude Oil Supported By Supply Disruptions, Silver Futures, Corn Futures Rising Amid Supply Concerns
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Summary:
- Brent Crude rose from an 8-month low.
- Silver futures trading close to 2 year lows.
- Corn futures have been climbing steadily.
Brent Crude oil rose from 8-month low
Brent crude prices rose from an eight-month low of $84.6 a barrel, buoyed by worries about potential supply disruptions, particularly those from Russia given the impending EU ban on its fuel, and rumors that OPEC might step up market intervention. Early this month, OPEC and its oil-producing allies—including Russia—announced a modest supply reduction and promised to take further measures if the market volatility persisted. However, concerns are growing that a sudden tightening from the world's main central banks might halt global economic development and reduce energy demand. Additionally, a higher dollar has been pressuring energy markets, raising the cost of commodities with dollar prices for buyers using other currencies.
Brent Crude Oil Futures Price Chart
Silver trading near 2-year low
In late September, silver futures were trading at $18.6 per ounce, close to the over two-year low of $17.9 reached earlier in the month as the Federal Reserve's monetary tightening momentum drove investors away from bullion investments and into the interest-bearing US dollar. The Fed increased the rate on its funds by 75 basis points for the third time in a row in addition to rate increases by other significant central banks, and forecast that borrowing may reach as high as 4.6% by March 2023. A worldwide economic slowdown is also impacting jewelry sales as well as consumer spending in China and India, two of the world's largest consumers of gadgets and autos. Additionally, while China and India take advantage of cheap oil and gas from Russia and Europe is moving back to coal as an energy option, progress toward green technology, such as the development of solar panels, has suffered a setback.
Silver Dec ‘22 Futures Price Chart
Corn futures have been climbing steady
Since reaching an eight-month low in July, corn futures have been climbing steadily, breaking from their association with oil as worries about a lack of supply overcame expectations of a decline in demand. Expectations for the current crop were limited by bad weather in the major growing regions of the Americas. In the US, WASDE forecasts that output will amount to 13.9 billion bushels in the upcoming marketing year, down 415 million from earlier projections due to a fall in yields and harvesting area. Additionally, ending stocks and global production were revised downward. In the US, summer droughts caused havoc on domestic maize crops during the current marketing year, resulting in yields that were the lowest since the drought of 2012. Additionally, the impacts of La Nina in South America significantly harmed the health of the harvests, putting additional strain on supply.
Corn Dec ‘22 Futures Price Chart
Sources: finance.yahoo.com, tradingeconomics.com
