WTI Crude Oil futures, Palladium futures touching 1-month highs, Coffee touching 15-month lows

Summary:

• Palladium futures extended gains to their highest in a month.
• The price of Arabica coffee futures dropped to its lowest level in 15 months.
• Oil prices were kept in check by worries about a global economic downturn.

WTI Crude futures

After a Russian-made missile struck Polish territory and killed two citizens, geopolitical worries shook the markets, as WTI crude futures hovered close to $87 per barrel on Wednesday. The missile's launcher is still unknown with certainty, according to Polish President Andrzej Duda, who also noted that it was an isolated incident. As the European Union prepares to impose an embargo on Russian crude supplies starting in December, the possibility of a wider conflict in Europe threatens to compound the outlook for a tightening supply on the oil market. OPEC further reduced its estimates for the growth of the world's oil consumption in 2022 and 2023, citing escalating economic problems such high inflation, rising interest rates, and supply chain disruptions. Oil prices were kept in check by worries about a global economic downturn as major central banks tightened policy further and uncertainty relating to COVID in the world's largest petroleum importer, China.

✕ WTI crude futures price chart

Palladium futures supported by prospects of a more dovish fed

The dollar index neared 3-month lows as palladium futures extended gains to above $2,070 per ounce, the highest in a month, on the expectation that the Fed will raise interest rates more slowly as inflation starts to decline. As a result of higher interest rates, slower economic development, and the replacement of platinum for palladium, palladium prices are still 35% below their March peak. After four straight 75 bps rises, the Federal Reserve, the most powerful central bank in the world, is anticipated to boost the fed funds rate by 50 basis points in December. Furthermore, despite the price increase and supply chain disruptions, demand for palladium, which is used in auto catalysts for gasoline-powered vehicles, has not yet returned to its pre-pandemic levels. The palladium market is projected to be balanced or in deficit this year and next year, according to analysts who predict supply-demand balances.

✕ Palladium Mar ‘23 futures price chart

Coffee futures fell due to improved supply prospects

The price of Arabica coffee futures dropped to $1.64 a pound, its lowest level in 15 months, as supply prospects improved and demand projections were expected to decline. World Weather reported that Brazil's 2023–24 coffee crop had grown in a "very excellent climate" due to frequent rain and plenty of sunshine, sparking hopes for a potential record production in the top producer Brazil the following year. Additionally, Colombia, Mexico, and Central America are predicted to produce better crops. Demand is expected to decrease at the same time that global growth slows. Even yet, according to the most recent statistics, ICE-certified arabica stocks hit a new low of 384,795 bags, which is a 23-year low, although traders predicted that stocks would soon rebound.

✕ Coffee Mar ‘23 futures price chart

Sources: finance.yahoo.com, tradingeconomics.com