Crude Oil Prices Inch Higher as Equity Markets Recover
Yesterday, ICE prices settled 0.31% higher driven by a recovery in equity markets and a supportive inventory report from the Energy Information Administration (EIA).
The EIA reported a 1.75m barrel increase in US crude oil inventories, much lower than the 4.59m barrel increase reported by the American Petroleum Institute (API) the previous day. In addition, Cushing crude oil inventories fell by 1m barrels, while gasoline and distillate stocks also saw decreases. US gasoline inventories are now at their lowest since early January. The recent data indicates a positive trend in the market.
Another positive development is the statement from the US energy secretary suggesting that current crude oil prices present an attractive opportunity to refill the Strategic Petroleum Reserve (SPR). The SPR currently stands at under 396m barrels, with plans to refill it gradually over the coming years.
European gas prices also surged as hopes for a partial resumption in Russian gas flows to Europe faded. Investment funds reversed their selling trend, buying 1TWh over the last reporting week.
Copper Prices Approach $10,000/t
Copper prices on the London Metal Exchange (LME) are nearing $10,000/t, a level last seen in October last year. The surge in prices is attributed to Donald Trump’s tariff threats, which have led to increased flows into the US and tightening supplies globally. President Trump’s order for the US Commerce Department to investigate possible import tariffs on copper has also impacted the market.
While CME copper stocks have been rising steadily, LME stockpiles have seen modest declines. The cancellation of copper warrants in the LME has increased significantly since late February, with the largest drawdowns in Asia and Europe.
Copper prices are expected to remain supported in the near term due to front-loading ahead of potential tariffs and tightening supply in the ex-US market. The US’s reliance on copper imports for domestic consumption further adds to the bullish outlook for prices.
Analysis: The recent developments in crude oil and copper markets indicate a positive trend for investors. While geopolitical factors and supply dynamics continue to play a role in price movements, the overall outlook remains favorable for both commodities. Investors may consider monitoring these markets closely for potential investment opportunities.