Oil, Gas and Shipping are key charts to watch in global commodity markets this week Ship’s crew

By Sophie Caronello

March 19, 2023 (Bloomberg) – Here are some notable charts to watch in the commodity markets over the coming days.

Oil Gasoline

Oil comes off its worst weekly price since April 2020 as turmoil in the banking sector fuels concerns that the global economy will slide into recession and hurt demand, contributing to a dismal first quarter for West Texas Intermediate and Brent futures. Both crude oil benchmarks are down at least 15% in 2023, while natural gas futures in the U.S. and Europe are down 48% and 44%, respectively. That spells trouble for the balance sheets of the world’s energy giants. Exxon Mobil Corp., Chevron Corp., Shell Plc and BP Plc all posted record earnings in 2022, but lower oil and gas prices are dampening the chances of a repeat this year.

Shipment

The volatility of natural gas creates demand uncertainty for shippers. While ship demand for commodities like metals and oil has recovered, LNG freight rates are still hovering near six-month lows. Warmer weather leaves ships aimless in the Atlantic basin as Europe pulls fewer cargoes from the US. That’s a quick change from a few months earlier when freight rates hit record highs. Meanwhile, prices for bulk carriers and crude oil tankers have soared after the Lunar New Year holiday in China.

gold

Holdings in precious metals-backed exchange-traded funds posted their biggest weekly gain in more than a year last week amid the unfolding banking crisis, while spot gold rose to $1,989.25 an ounce. The financial instability has dramatically changed expectations for the Federal Reserve’s rate hike curve, providing the perfect macro environment for the precious metal as investors seek safety in safe haven. Focus will now turn to the March Federal Reserve meeting, with most economists narrowly expecting policymakers to hike rates to curb high inflation, which could further support gold prices.

soybeans

The Buenos Aires Grain Exchange, which cut its soybean estimate by four million tons last week, will update its forecast for 2023 on Thursday. The local forecaster’s current forecast is eight million tons below the US Department of Agriculture’s estimate. It’s a big difference, but the two agencies’ final numbers have historically aligned. Argentina is the world’s largest exporter of soybean meal for animal feed and soybean oil for cooking and biofuels, so further cuts risk further disrupting the global trade matrix.

Also read: Argentina’s grain exports collapse

grain trade

Keep an eye on food prices. While an agreement allowing Ukraine to safely export grain and other crops from key Black Sea ports has been extended, the pact’s duration remains uncertain, casting a shadow over the future state of global supplies. That has the potential to further put pressure on food costs, which – while still high – have been declining since the Russian invasion of Ukraine just over a year ago. The UN price index, which tracks five major exported food groups, is at its lowest level since September 2021 after rising to a record level last year.

–Assisted by Gerson Freitas Jr., Ann Koh, Dominic Carey and Yvonne Yue Li.

© 2023 Bloomberg LP

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