Coffee Prices Supported By Concerns Around Low Supplies, Palladium Reaching 2-week Highs, WTI Crude Oil Futures Hitting Lowest Levels Since February
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Summary:
- WTI Crude prices under pressure.
- More upward momentum for coffee futures is expected.
- Palladium futures.
WTI Crude Oil Futures
A larger-than-expected drop in US crude stocks was more than offset by rising threats of a global recession and a potential increase in Iranian supply, which kept WTI crude futures under pressure at around $86 per barrel on Wednesday, the lowest since February. In response to a "final" draft agreement on renewing the 2015 nuclear agreement, the EU said on Tuesday that it was researching Iran's answer. Analysts predicted that a prospective deal might release approximately 2.5 million bpd of Iranian petroleum to the world markets. The potential of a worldwide economic slowdown, which may significantly affect energy demand, has also remained a concern for investors. Major central banks are expected to boost interest rates further to reduce inflation. According to a report from the industry, US crude stockpiles dropped by 448,000 barrels last week, compared to market expectations of a decline of 117,000 barrels.
WTI Crude Oil Sep ‘22 Futures Price Chart
Coffee predicted to rise due to low stocks
Due to low stocks and ongoing worries about decreased coffee yields in leading producer Brazil, Arabica coffee futures on the ICE were trading at $2.2 per pound, a level not seen in a month. The most recent data showed that 571,580 bags—a new 23-year low—were held in ICE-monitored coffee stocks. Early in February, coffee prices rose to over a decade highs of $2.6; this year, more upward momentum may be anticipated. From an earlier projection of a 1.2 million bag surplus, the International Coffee Organization (ICO) has reduced its global supply estimate for 2021/22 to a shortfall of 3.13 million bags. Additionally, ICO downgraded its projections for worldwide output while highlighting stronger global consumption.
Coffee Dec ‘22 Futures Price Chart
Palladium reaching 2 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 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
