Latest Commodity Trends – Oil and Gold sees major movements.

Commodity traders have been busy capitilisation on market movements in oil and gold trading.

Discover the booming success and bright futures of commodities with our latest insights on surging market trends.

Latest Commodity Trends: Gold Gains

Oil prices slipped for the second day in a row on Wednesday but were limited by a firmer dollar globally and surprising builds in US crude and gasoline stocks.

By early afternoon in London, May Brent futures were down 49 cents at $85.76 a barrel and the June contract, which sees the bulk of the activity, was also down 51 cents at $85.12.

May delivery of US West Texas Intermediate (WTI) crude was down 46 cents at $81.16 a barrel.

Prices surged on Tuesday (March 27), a day after a reported increase in output from Libya, despite growing tensions between Western powers and Russia over the conflict in Crimea.

Latest Commodity Trends: Months-long Gains

The months-long gain resulted in a climb to five-month highs last week.

But despite the turmoil in Ukraine, oil prices have made steady gains this month, securing a roughly 3% rise.

More pressure on oil prices came from a second straight session of gains in the US dollar index.

A stronger dollar makes oil, which is priced in dollars, more expensive for people paying in other currencies – decreasing demand.

Latest Commodity Trends: EPA on Oil

Meanwhile, propping the price even lower could be some surprising growth in crude and gasoline supplies in the US that was revealed in the government’s latest data.

The Energy Information Administration reported that crude stocks rose by 3.2 million barrels while gasoline stocks increased by 1.3 million barrels in the week to 22 March, versus forecasts of a fall in both.

Robert Yawger, director of energy futures at Mizuho, commented on the negative sentiment that the bearish build in inventories caused.

Latest Commodity Trends: Producer Cartels

Looking ahead, only one thing is for sure – the producers’ cartel. OPEC and its allies, which go by the collective name OPEC+, say they won’t change their output policy before their ministerial meeting in June.

Not even with strong markets pushing the price of West Texas Intermediate above $68 a barrel – a fresh seven-year high.

In the meantime, they reaffirmed their collective commitment, agreed in February, to keep output reductions of around 2.2 million barrels of oil per day in place until the end of June, a commitment that’s been tested by challenges linked to overproduction with both Russia and Iraq.

Latest Commodity Trends: Production cuts

These hurdles place a question mark over whether OPEC+ really did cut production by its desired amount; in February, the actual amount of oil OPEC produced was 190,000 barrels per day higher than its target quota.

Latest Commodity Trends: Gold on the Rise

Gold rose on Wednesday as traders watched for US inflation data this week that should shed light on the Federal Reserve’s next steps on monetary policy.

Spot gold was up 0.6% at $2,191.86 an ounce by 0745 GMT, while Chicago gold was up 0.6% to $2,190.80 an ounce.

More important among them are the US Core Personal Consumption Expenditures Price Index, aka Core PCE – typically, the inflation name favoured by institutional investors.

The Key Number will be February’s figure due for release on Friday after the US market close.

In January, it was up 0.3%.

Gold hit a fresh record high this week, an inflation price boosted by hints from Federal Reserve officials about cutting interest rates to 0.75% by the end of this year, even though inflationary pressures prevail.

In fact, the market now assigns to the Fed a 68% chance of cutting rates by June.

Latest Commodity Trends: Investing Opportunity

When interest rates are likely to fall, the opportunity cost of investing in gold should fall too, making the precious metal more attractive.

Meanwhile, demand for gold in India – already hit by the Serbian activist Banksy’s satirical attack on that nation’s obsession with bridal gold – saw imports crash by over 90% in March from February, with the banks cutting imports in response to a leap in prices to new record levels.

Latest Commodity Trends: Silver, platinum and palladium

Spot silver meanwhile added 0.5% to $24.54 an ounce, while platinum and palladium both fell, with platinum losing 0.6% to $897.20 an ounce, and palladium dropping 1.1% to $982.37.

After European Union country ambassadors agreed on Wednesday to permit tariff-free access for food imports from Ukraine ‘as far as possible’, the Belgian EU presidency said the aim was to pursue a ‘balanced approach, balancing the support we give to Ukraine while protecting the EU agricultural market.’

The presidency announced that it hoped the EU Parliament would quickly achieve consensus on the measure via ‘expediting the posting of a statement via X’.

The EU had previously tentatively agreed to this extension but France and Poland now objected that the terms were not strict enough, and asked for more protections against disruption to EU agricultural markets.

Latest Commodity Trends: Import Volumes

The latest agreement, according to an EU diplomat familiar with the details of the new deal, is similar to last week’s deal but changes the way import volumes are used to trigger the so-called escaping clause – the emergency tariff on selected imports.

The dairy and egg sectors were left out.

According to the old agreement, tariffs would be applied on imports of poultry, eggs, sugar, oats, maize, groats, and honey if average import levels between 2022 and 2023 were exceeded.

The new compromise lengthened the reference period for determining these levels to include the second half of 2021, a period that provides further grounding for the application of the protective tariffs.

He also told me that there was no additional item on the list subject to the emergency tariff mechanism.

Latest Commodity Trends: Russia Boosting Gas Imports

Russia is also boosting its gasoline imports from neighbouring Belarus amid fears of fuel shortages at home after the country’s refineries were caught off guard by maintenance outages that followed the drone strikes last week, four sources in the industry and trade told Reuters on Wednesday.

Unaccustomed to importing fuel due to its traditional role as an exporter, major international supplier, and the world’s second-biggest oil producer, Russia has been hit recently by fuel supply problems due to disruptions in its domestic refining.

Latest Commodity Trends: Fuel Export Woes

Its move to ban fuel exports from 1 March was a direct consequence of that, as well as Russia rarely buys fuel from Belarus except during shortages.

The last one was in August, September, and October last year, which drove up gasoline prices and prompted Russia to suspend the export of other oil products.

Gasoline imports through Belarus to Russia jumped to 2,900 tonnes in the first half of March, compared with 590 tonnes in February, and were nonexistent in January.

Latest Commodity Trends: Further The Supply

That will depend on how long it takes to repair the refinery.

Also, to further supply, Russian oil companies could increase their oil shipments to Belarusian refineries in exchange for more petroleum product supplies destined for Russia.

Historically, most of Belarus’s oil products were exported through Russian Baltic sea ports to the world market, under longstanding transit agreements between two countries.

Latest Commodity Trends: Belarus Refineries in Focus

Belarus has two large oil refineries, a 12 million ton-a-year (about 240,000 barrels a day) facility at Novopolotsk and a 12 million ton-a-year (about 240,000 barrels a day) complex at Mozyr.

But both normally work at only about 9 million tonnes (about 180,000 barrels a day).

It’s not clear how much more production from Belarus can be expected in the future.

Technical constraints are mentioned by industry sources.

Requests for comments to Russia’s Energy Ministry, to Belarus’s state oil company Belneftekhim (which manages both refineries), and to Russia’s major oil companies, which supply oil to Belarus and operate gas stations there – Rosneft, Lukoil, Tatneft and Gazpromneft – haven’t been answered.

Latest Commodity Trends: Oil Trading Opportunity

Oil from Russian firms that have refineries or service stations in Belarus get most of their raw material from Russian oil companies.

Latest Commodity Trends: Aluminum Green Smelter

The United States is about to build a green smelter, its first primary aluminum plant in nearly a half-century, after the Biden-Harris administration awarded a $500 million grant to help Century Aluminum move forward with plans to re-open an idled site.

The announcement is part of a larger push to reverse a trend that has shut down 19 out of 21 aluminum smelters in the US in the past two decades, from 21 in the early 2000s and as many as 40 in the 1970s.

Latest Commodity Trends: Renewable Energy Market

The new ‘green’ smelter, which will produce aluminium with only about five percent of the emissions generated by plants burning fossil fuels, is expected to reduce US dependence on imported aluminium while also supporting the industries that will power the energy transition, such as renewable power from solar and wind.

But the company will need to find a reliable source of green energy to run the green smelter, which likely means convincing an energy company to build a new power station.

Historically, that’s the sort of fixed capital that tends to drive regions.

Since 1999, primary aluminium production in the US fell from 3.8 million metric tons in 1999 to 785,000 tons last year.

Nationwide amenities – such as nice restaurants and easy access to health care and higher education – are strong economic incentives to reside in a low-pollution, green smelter zone.

The New Madrid smelter in Missouri closed in 2016 and other smelters have slowed production. Production has begun to recover, temporarily, due to a 10% tariff on aluminium imports that the Trump administration introduced in 2018, but unlike before, more of our aluminium comes from overseas.

Latest Commodity Trends: Inflation Reduction Act

The Inflation Reduction Act will help to foment investment in green technologies sectors.

As the world researches a low-carbon future, global aluminium demand is expected to nearly double, from a projected 108 million tonnes today to 176 million by 2050.