Coffee Prices Supported By Limited Stocks, Palladium Futures Reaching 2-week Highs, Upbeat IEA Report For US Crude Stocks
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Summary:
- IEA raised its global forecast for global oil consumption.
- Limited stocks and declining coffee yields.
- Palladium futures reaching 2 week highs.
WTI Crude Oil
As investors weighed a somewhat upbeat IEA report against a higher-than-anticipated rise in US stocks and the restart of oil flows on the Russia-to-Europe Druzhba pipeline, WTI crude futures were trading around the $92-per-barrel level. The International Energy Agency has increased its forecast for global oil consumption in 2022, citing increased gas-to-oil switching due to rising power and natural gas prices. The organization also predicts that by the beginning of next year, when the EU ban goes into effect, Russia's oil production will have decreased by close to 20%. On the other hand, according to EIA data, US crude stockpiles increased by 5.5 million barrels last week instead of the 73,000 barrels that analysts had predicted. Additionally, over the last four weeks, the US gasoline demand was 6% lower than it was a year ago. In the meantime, earlier this week, flows on the Russia-to-Europe Druzhba pipeline restarted, allaying some supply concerns.
WTI Crude Sep ‘22 Futures Price Chart
Coffee Futures
Due to limited stocks and ongoing worries about declining coffee yields in top producer Brazil, Arabica coffee futures on the ICE were trading above the $2 per pound threshold. According to the most recent data, ICE-monitored coffee stocks hit a fresh 23-year low of 591,959 bags, which is the lowest level since 1999. Given the commodity's bright prognosis, more upward momentum could be anticipated this year. Coffee prices recently touched a nearly 10-year high of $2.6. From a previous projection of a +1.2 mln bag surplus, the International Coffee Organization (ICO) has reduced its global 2020/21 supply estimate to a deficit of -3.13 mln bags. Additionally, ICO downgraded its projections for worldwide output while highlighting stronger global consumption.
Coffee Dec ‘22 Futures Price Chart
Palladium Futures
Palladium futures increased to their highest level in over two weeks, approaching $2100 a tonne, as significant dollar-denominated commodity buying increased in response to a halt in the dollar's rally. After the Fed chair reduced expectations for more large rate hikes while lifting the interest rate as widely anticipated, the US dollar stayed near 2-month lows. As the situation in Ukraine shows no signs of ending, worries about shipping problems from Russia, the metal's primary supplier, continue to exist. Vladimir Potanin, a Russian tycoon who owns 36% of Nornickel, the largest palladium manufacturer in the world, was recently sanctioned by Britain.
Palladium Sep 22 Futures Price Chart
Sources: finance.yahoo.com, tradingeconomics.com
