Is it a bull or a bear? Bank warns of "critical points"
The global commodity market is under pressure from rising prices, which, according to HSBC's forecast, may soon reach new, higher levels.
"The longer the Strait of Hormuz remains closed, the more the supplies are depleted and the greater the likelihood that we will reach critical points in some commodity markets," the bank's analysts said.
Bloomberg, citing collected data, reminds that in mid‑May commodity prices reached a record level, after which they fell due to reports of a possible extension of the ceasefire between the United States and Iran and the prospect of a lasting peace agreement.
Factors contributing to rising commodity prices also include increasing demand for non‑precious metals such as copper, and the approaching weather phenomenon El Niño, which could negatively affect crop supply.
HSBC economists considered the commodity market still in a "super-bull" phase, but, as they emphasize, it differs significantly from earlier "super‑cycles" due to supply disruptions.
The HSBC team forecasts that oil stocks "could reach critically low levels, and thus cause sharp, nonlinear price increases and real shortages."
A similar situation exists for aluminium and copper.
Source: Bloomberg.
Also read: Impasse in the Middle East hits fuel prices. Will there soon be a drop to $40 per barrel?
See also: Gold price fell 12%, will there be further discount? Expert: "With possible de‑escalation there is a chance to make up for losses"
Trump dismissively about the Middle East. "I really don't care"
The fragile ceasefire in the Middle East loses credibility each day, especially after recent statements by Donald Trump.
The President of the United States, asked about the possibility of a collapse of the peace negotiations with Iran, said in an interview with CNBC:
"Honestly, I don't care whether they end. I really don't care. I could not care less."
The Republican admitted that he is not worried about the recent rise in oil prices, which, in his opinion, "will fall like a stone in the very near future".
He also emphasized that Americans who understand the importance of preventing Iran from enriching uranium will have nothing against further fuel price hikes at the pumps.
"When it becomes clear that the goal is to prevent Iran from possessing nuclear weapons, people are willing to pay a little more", he said.
Trump assured that fuel prices at the pumps will fall after the talks with Tehran conclude:
"If they end, they end. If not, in my opinion, they have lasted too long. Honestly, they seemed increasingly boring."
The Brent futures contract price on Tuesday, June 2, is at $93 USD per barrel after a 1% drop.
Chart. Brent futures contract price
Source: Trading Economics.
The WTI futures contract price, however, reaches $91 USD per barrel, also after a 1% discount.
Chart. WTI futures contract price (West Texas Intermediate)
Source: Trading Economics.
Also read: Gold price unstoppable? Expert: "Gold could equally reach $7,000 or $10,000 per ounce"
See also: Fuel prices in Poland will rise, will there be shortages at pumps? Expert: "It will not be a one‑off sharp move that will affect drivers"
Sources: Bloomberg, CNBC.
