WTI crude oil down 4% on Friday, corn futures, gold stabilized on Friday but are still down this week
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Summary:
- WTI crude touching 1-month lows.
- Gold prices stabilized around $1,760 an ounce on Friday but were on track to end the week lower.
- Corn futures have risen by more than 13% in 2022.
WTI crude oil on track to lose over 10% this week
WTI crude futures fell 4% on Friday to around $78 per barrel, the lowest level in over a month, and were on track to end the week more than 10% lower due to a deteriorating demand picture that outweighed supply-side worries. In China, the world's top fuel importer, resurgent Covid outbreaks have crushed reopening hopes and muddied the demand outlook. There are still worries that major central banks' aggressive monetary tightening could push the world economy into a recession, which would harm demand for energy. President of the St. Louis Federal Reserve James Bullard recently warned that the federal funds rate might rise above what the market is currently pricing, to a range of 5 to 7 percent as authorities fight inflation. However, investors continued to be wary of the highly ambiguous supply outlook heading into the winter, with the European Union due to block Russian crude exports starting in December and OPEC anticipated to maintain tight oil markets.
WTI Crude Futures Price Chart
Gold on track to end the week lower
Due to robust US Federal Reserve rhetoric that implied more rate rises than markets anticipated and resisted predictions of a Fed pivot, gold prices stabilized around $1,760 an ounce on Friday but were on track to conclude the week lower. Most significantly, St. Louis Fed President James Bullard stated that the policy rate is too lenient and that it might rise above what the market is currently pricing, to a range of 5% to 7% as authorities attempt to combat inflation. Mary Daly, president of the San Francisco Fed, reiterated that a pause is "off the table," and Esther George, president of the Kansas City Fed, cautioned policymakers against stopping rate increases too soon. Even though gold is frequently used as a hedge against inflation and economic uncertainty, owning non-yielding bullion becomes more expensive as interest rates rise.
Gold Dec ‘22 Futures price chart
Corn futures
Since the start of 2022, corn prices have climbed by 77.91 USd/BU, or 13.13 percent, according to trading on a contract for difference (CFD) that monitors the benchmark market for this commodity.
Corn Mar ‘23 futures price chart
Sources: finance.yahoo.com, tradingeconomics.com
