Energy – Brent Tumbles Below $80/bbl
Oil prices have broken below $80/bbl for the first time since early June due to ongoing demand concerns, leading to a wave of speculative selling across the commodity market.
ICE Brent settled 1.66% lower yesterday, pushing the market below the $80/bbl mark for the first time in months. Weak demand from China continues to drive the bearish sentiment in the oil market, with the Asian giant accounting for more than half of the global oil demand growth expected in 2024.
Concerns over the recent elections in Venezuela are also weighing on the market, with doubts surrounding the legitimacy of the results. The US government has hinted at potential sanctions based on the release of voting data.
On the other hand, natural gas prices rallied on forecasts of hotter weather in Asia, making the region a more attractive destination for spot cargoes.
Metals – China’s Gold Demand Falls Amid Record Prices
China’s gold demand dropped nearly 6% in the first half of the year due to record high prices, according to the China Gold Council. Jewellery purchases fell significantly, while sales of bars and coins saw an increase.
Despite the decline in demand, central bank purchases are expected to remain strong amidst economic uncertainties and geopolitical tensions, providing support for gold prices as a safe-haven asset.
In other news, concerns over a potential strike at BHP’s Escondida mine in Chile have emerged, raising worries about supply disruptions.
Agriculture – Vietnam Coffee Shipments Fall
Vietnam’s coffee exports have seen a significant decline due to poor weather conditions, with a drop of 35.7% year-on-year in July. Additionally, US grain exports have shown strong demand, indicating a positive trend in the agricultural sector.
In conclusion, the current market conditions are driven by a combination of factors including demand concerns, geopolitical tensions, and weather-related disruptions. Investors should closely monitor developments in key markets such as oil, metals, and agriculture to make informed decisions about their investments.