The energy market has stabilized after two days of decline, with natural gas prices rallying following the EU’s announcement of stoppages in Russian flows via Ukraine. NYMEX WTI is trading above $70/bbl, while ICE has edged above $73/bbl this morning, driven by a significant drawdown in US commercial crude oil inventories reported by the American Petroleum Institute (API).
API Reports Oil Inventory Draws
The latest API numbers show a drop of 4.7m barrels in US crude oil inventories, exceeding market expectations of 1.6m barrels. However, gasoline and distillate stocks saw large builds, with gasoline increasing by 2.4m barrels and distillates by 0.7m barrels. The Energy Information Administration (EIA) report is expected later today to provide further insights into the oil market.
In China, imports of liquefied natural gas fell by 8.7% year-on-year in November, the biggest drop since January 2023 due to higher prices affecting spot purchases. However, gas imports via pipeline from Russia have increased. On the other hand, Chinese gasoline exports surged by 42% year-on-year to 1.26mt last month, attributed to a tax rebate reduction from 13% to 9%.
European gas prices also saw a significant increase following the European Union’s announcement of halting gas flows from Russia via Ukraine. TTF front-month futures rose over 4% to close above EUR42/MWh as the EU prepares for the expiration of the transit deal between Ukraine and Russia by year-end.
Iron Ore Falls on Demand Woes
Iron ore prices have declined for the second consecutive session, dropping below US$103/t in early trading today. China’s announcement of greater fiscal and monetary support for next year failed to boost sentiment, as the market remains concerned about the struggling property market and weakening steel industry in China.
Chinese trade data shows a decline in imports of unwrought aluminium and steel products, while alumina exports jumped significantly in November. Speculators reduced net long positions in iron ore and aluminium, while increasing bullish bets for zinc.
India’s Sugar Output Declines
India’s sugar production (excluding ethanol diversion) fell by 17% year-on-year to 6.14mt, while sugar diversion towards ethanol is expected to rise significantly compared to last year. China also saw a decline in sugar imports, aligned with the government’s initiatives to reduce overseas grain imports to support the domestic market.
Overall, the energy market remains supported by inventory draws and geopolitical tensions, while the metals market faces challenges from weakening demand and trade dynamics. Understanding these market trends can help individuals make informed decisions about their investments and finances. It is crucial to stay updated on the latest developments to navigate the volatile world of commodities and make sound financial choices.
Increase in EU corn imports by 10% YoY to 9.2mt signals stronger demand amidst weaker domestic supply. Find out more about this market trend and how it could impact your investments and finances.
Disclaimer: This publication by ING is for informational purposes only and does not constitute investment advice. Read more about it here.
Original Post: The Commodities Feed: WTI Holds at $70/bbl.
Analysis: The rise in EU corn imports highlights a growing demand for this commodity, which could have implications for global markets and prices. Investors should stay informed about these developments to make well-informed decisions.