Palladium Prices Touching Two-Week Highs, OPEC+ Increasing Crude Supply Of WTI Crude Oil, Coffee Supply Outlook Seemingly Poor
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Summary:
- EIA data due later today.
- Concerns around shipping Palladium from Russia persist.
- ICO downgraded its projections for worldwide output while highlighting stronger global consumption.
WTI Crude Oil
After it was revealed that OPEC+ would only increase crude supply by 100,000 bpd for the following month, WTI crude futures reversed early losses to rise more than 1% to $96 per barrel. While in Saudi Arabia last month, US President Joe Biden urged OPEC to enhance production, but due to capacity issues and some member states' failure to achieve output targets, it seemed unlikely that there would be a large increase in supplies. In July, OPEC increased its daily oil production by 310,000 barrels, with only Saudi Arabia and the UAE reportedly having some remaining production capacity. EIA data that will be made public later today should shed some light on how a downturn in the economy would affect demand.
WTI Crude Oil Sep ‘22 Futures Price Chart
Palladium touching two-week highs
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 a 36% share in Nornickel, the largest palladium manufacturer in the world, was recently sanctioned by Britain.
Palladium Spe ‘22 Futures Price Chart
Coffee supply outlook seemingly poor
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 inventories have reached a 23-year low of 712,817 bags. Given the bullish outlook for the commodity, additional upward momentum could be anticipated this year. Coffee recently hit 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
Sources: finance.yahoo.com, tradingeconimics.com
