Monthly Losses for Brent and WTI

Both benchmarks are headed for monthly losses. Brent futures are on track for a decline of over 5% from the previous month, while WTI is set to drop by more than 3%. This downturn reflects a broader risk-off environment that has exerted downward pressure on oil prices, overshadowing a larger-than-expected drawdown in U.S. crude inventories reported by the American Petroleum Institute (API).

API Reports Significant Inventory Drawdown

According to API data released on Wednesday, U.S. crude oil and gasoline inventories fell last week, while distillate stocks rose. Crude stocks were reported down by 6.49 million barrels for the week ending May 24, surpassing analysts’ expectations of a 1.9 million barrel decrease. Gasoline inventories decreased by 452,000 barrels, and distillate stocks increased by 2.045 million barrels, contrasting with projections of a 1 million barrel draw in gasoline and a 400,000 barrel build in distillates.

OPEC+ Meeting and Global Oil Inventories

Rising global oil inventories through April due to subdued fuel demand may bolster the case for OPEC+ to maintain supply cuts. OPEC+ producers, including the Organization of the Petroleum Exporting Countries (OPEC) and allies like Russia, are set to meet on June 2. Analysts and delegates suggest that current production cuts might be extended until the end of the third quarter to support prices.

Impact of Fed Policies on Oil Prices

Oil markets have been pressured by expectations that the Federal Reserve will maintain higher interest rates for an extended period. Brent crude settled at its lowest in over three months on May 23. A recent Fed survey indicated that U.S. economic activity continued to expand from early April to mid-May, albeit with growing pessimism about the future and modest inflation increases. Higher borrowing costs typically restrict funds and consumption, negatively affecting crude demand and prices. Market expectations now suggest that the Fed may not cut rates until September, rather than the previously anticipated June.

Market Forecast: Bearish Outlook

Given the persistent pressure from high borrowing costs and potential extensions of OPEC+ production cuts, the short-term outlook for oil prices remains bearish. Traders should prepare for continued volatility, with potential support levels being tested as market trends evolve.

Technical Analysis

XAU/USD Current price: $2,347.35

• A bunch of dismal United States macroeconomic data hit the Greenback.
• The focus shifts to the US Personal Consumption Expenditures Price Index.
• XAU/USD under modest selling pressure but not far from its weekly high.

Spot Gold is little changed on Thursday, trading around its daily opening in the $2,340 price zone. XAU/USD extended its weekly slide to $2,322.50 during Asian trading hours, grinding higher afterwards amid a slight improvement in the market’s sentiment. The advance extended up to $2,351.72 with the release of dismal United States (US) data.

The US Bureau of Economic Analysis (BEA) reported that the country’s Gross Domestic Product (GDP) expanded at an annual rate of 1.3% in the first quarter, downwardly revising the previous estimate of 1.6%. Furthermore, Initial Jobless Claims in the week ended May 24 increased to 219K, worse than the 218K expected, while the preliminary estimate of April Wholesale Inventories increased by 0.2%, worse than the 0.1% decline anticipated.

Wall Street came under selling pressure, with the three major indexes trading in the red. At the same time, Treasury yields retreated, limiting USD strength against the bright metal. The 10-year note currently offers 4.54%, down 7 basis points (bps), while the 2-year note yields 4.92%, shedding 5 bps.

Market participants are now waiting for fresh US inflation data, which will be released on Friday. The country will publish the April Personal Consumption Expenditures (PCE) Price Index, which is foreseen at  2.7% YoY, matching March figures. The core annual reading is also expected to remain unchanged at 2.8%.

XAU/USD short-term technical outlook

XAU/USD is weak, according to technical readings in the daily chart. Technical indicators stand within neutral levels with modest downward slopes, not enough to suggest an upcoming directional movement. At the same time, a flat 20 Simple Moving Average (SMA) caps the upside at around $2,355.50, while the 100 and 200 SMAs maintain their upward slopes well below the current level.

In the near term, and according to the 4-hour chart, XAU/USD is neutral. Technical indicators stalled their advances around their midlines while the pair remains below directionless moving averages. The weekly high at around 2,364.00 is the level to surpass for bulls to retake control of the pair.

Support levels: 2,334.35 2,325.30 2,307.10

Resistance levels: 2,355.50 2,364.00 2,372.90 

Copper is popular right now. In intraday trading last week, on May 20, the London Metal Exchange three-month copper contract hit a record high of $11,104.50 per tonne.

The copper concentrate market is also breaking new records in May 2024. The treatment and refining charges (TC/RCs) that smelters charge miners for the processing of copper concentrate are at all-time lows.

Indeed, TC/RCs, which are measured as a discount to the cost of the refined metal, are in negative numbers – copper concentrate costs more than the finished material.

Fastmarkets most recently calculated the weekly copper concentrates TC index, cif Asia Pacific, at a discount of $3.80 per tonne on Friday May 24.

This was down by $0.80 per tonne from the assessment on May 17, and was the lowest level in Fastmarkets’ records going back to 2013.

The high prices of both refined copper and copper concentrate are shaking up the industry. BHP’s failed mega-bid for Anglo American was motivated by the prize of creating the world’s largest copper producer, which would have controlled 10% of global supply.

But while such mega-mergers create economies of scale, it is uncertain whether they boost overall copper supply. In any case, the bid demonstrated mining investors’ desire for more copper exposure.

“From the get-go, the takeover bid from BHP for Anglo has shone a spotlight on an already hot copper market,” Fastmarkets analyst Will Adams said. “The demand trend for the red metal [arising] from the green energy transition remains very bullish, and this is reflected in the recent [rise] in the price.”

Ramping-up production

Another way that mining companies can please copper-hungry investors is by ramping-up production. Indeed, there have been a slew of such project announcements in recent weeks.

MMG, the Chinese owner of the struggling Las Bambas copper mine in Peru, announced in May that its often-delayed expansion project could begin in the second half of 2024.

If it reaches full completion on schedule in early 2025, the expansion could take Las Bambas’ copper production to 400,000 tonnes per year, compared with 300,000 tonnes in 2023. The Las Bambas expansion has been delayed by local community protests.

In mid-May, Southern Copper Corp said that it would push ahead with its Tia Maria copper project, also in Peru. This project has been subject to local protests since 2015, but now the company feels that the time is right to take it forward.

It is not just the price of copper that is encouraging new projects, according to the chief executive officer of Triple Flag Precious Metals, Shaun Usmar.

“The higher gold price should boost copper production,” Usmar said. “According to our analysis, more than half of all future copper supply will come from polymetallic deposits. So a high gold price improves the financial feasibility of a copper-gold mining project.”

Greenfield mining projects

But while expansions are difficult, building new mines is even more so. Usmar estimates that the time for taking a new copper discovery to production can now be almost 20 years, compared with fewer than 10 years a decade ago.

“Developing a greenfield mining project is like the [motto from the movie] ‘Hunger Games’ – may the odds forever be in your favor,” Usmar said. “If you have a brownfield site that is next to existing ore bodies [and] infrastructure, and has community support, then that has a much better probability of success.

“Our analysis of pre-pandemic mining projects worth more than $500 million shows that one in five have been delivered on time and [within] budget,” he added.

“I think there is a fallacy at times, where investors will look at the space and think that a major [miner] has more capacity to bring new supply online, and that [creates] a lower-risk prospect than a single-asset producer, but the data doesn’t support that,” Usmar said. “We have seen massive overruns from big companies bringing on new supply.”

The danger for investors backing such long-term mining development projects is that the copper price could fall in the meantime.

“The current fundamentals of copper are not as bullish as the price suggests,” Adams said. “Stocks have risen sharply on the Shanghai Futures Exchange, the nearby spreads on the LME are not showing tightness, and the low TCs are more to do with excess smelting capacity rather than strong physical demand for refined metal.

“Also, much of the recent strength has been more to do with a short squeeze on CME copper, and the dislocation between where physical stocks are, the brands and the location,” he added. “A lot of the available copper stock is not deliverable against CME shorts – hence the squeeze.”

But a quick boost to copper supply has come from the Chinese scrap market, with the higher prices for copper motivating scrap traders to increase the volume of supply to smelters.

Inform your base metals strategy with metals price forecasts and analysis for the global base metals industry. Get a free sample of our base metals price forecast today.

• Silver price lost ground due to investors’ caution ahead of US GDP Annualized due on Thursday.
• Hawkish remarks from Fed officials have supported US Treasury yields, negatively impacting non-yielding assets like Silver.
• The escalated geopolitical tensions in the Middle East could limit the losses of the safe-haven Silver.

Silver prices extended its losses for the second successive day, trading around $31.40 per troy ounce during the Asian hours on Thursday. The price of the grey metal is struggling as investors adopt caution ahead of the release of US Gross Domestic Product Annualized (Q1) data on Thursday and the Core Personal Consumption Expenditures (PCE) Price Index figures on Friday.

US economic growth on an annualized basis for the first quarter is expected to grow by 1.3%, lower than the previous quarter’s 1.6% rise. Federal Reserve’s preferred measure of inflation, US Core PCE is expected to show an increase of 0.3% month-over-month and 2.8% year-over-year in April.

Hawkish remarks from US Federal Reserve (Fed) officials have heightened concerns about potential rate hikes, fueling risk aversion sentiment. This has supported US Treasury yields while negatively impacting non-yielding assets like Silver.

Reuters reported on Tuesday that Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, hinted at the possibility of a rate hike. Kashkari remarked, “I don’t believe anyone has completely ruled out the option of increasing rates,” expressing doubts about the disinflationary trend. Additionally, Bloomberg reported on Wednesday that Atlanta Fed President Raphael Bostic stated that the path to 2% inflation is not assured and that the breadth of price gains is still significant.

In the ongoing geopolitical tensions in the Middle East, traditional safe-haven assets such as Silver could see an uptick in demand. The Israeli military announced on Wednesday that it had attained “operational control” over the Philadelphi Corridor, a 14-kilometer (8.7 miles) strip of land along the border between Gaza and Egypt, as reported by CNN.

• Gold price extends the decline on Thursday, despite a risk-on market mood.
• The US Dollar tracked  US Treasury bond yields higher on reducing bets for Fed rate cuts.
• The daily RSI flips bearish again, as Gold price challenges the key 50-day SMA support at $2,324.

Gold price is seeing fresh selling near $2,330, extending the previous decline early Thursday. The US Dollar (USD) gains further ground, exerting downside pressure on the Gold price. Markets eagerly look forward to a fresh batch of US economic data and more US Federal Reserve (Fed) policymakers’ speeches for fresh policy cues.

Gold price remains at the mercy of the Fed expectations

Gold price fell into the red for the first time this week, heavily undermined by the market’s growing skepticism that the Fed will cut interest rates more than once in 2024. According to the CME FedWatch Tool, markets are pricing about 53% odds that the Fed will hold rates in September while the probability of a November rate cut stands at around 60%.

The recent hawkish Fed commentary and policymakers’ concerns on inflation persistence have diminished the odds for aggressive Fed rate cuts, fuelling the extended rally in the US Treasury bond yields while reviving the US Dollar against its major competitors.

Furthermore, mounting tensions that the Israel-Hamas conflict could turn into a wider regional conflict keep the risk-off flows intact, especially after CNN reported on Wednesday that The Israeli military said on Wednesday that it established “operational control” over the Philadelphi Corridor, a 14-kilometer (8.7 miles) strip of land along the border between Gaza and Egypt.

Looking ahead, the US Dollar will continue to draw haven demand amid rife Middle East tensions, acting as a headwind to the Gold price. Additionally, the focus remains on the second estimate of the Q1 US Gross Domestic Product (GDP) data, weekly Jobless Claims and Pending Home Sales data alongside speeches from New York Fed President John Williams and Dallas Fed President Lorie Logan.

The data publication and the Fedspeak could help the market gauge the timings of the potential Fed rate cuts this year, impacting the value of the US Dollar and the non-interest-bearing Gold price.

Gold price technical analysis: Daily chart

Gold price once again failed at the rising wedge support-turned-resistance, then at $2,372, and turned south on Wednesday.

The 14-day Relative Strength Index (RSI) snapped its bullish momentum and flipped into bearish territory, recalling Gold sellers.

At the moment, the RSI points lower below the 50 level, near 48.00, implying more downside for Gold price.

However, Gold sellers need to crack the 50-day SMA support at $2,324 to initiate a fresh downtrend toward the $2,300 threshold.

The next key downside cap is seen at the May 3 low of $2,277.

On the flip side, If Gold price bounces off the 50-day SMA at $2,324, the immediate resistance will be seen at the 21-day SMA support-turned-resistance at $2,353.

A sustained move above the abovementioned barrier at $2,372 would provide legs to the recovery, calling for a test of the next topside barrier at the May 24 high of $2,384.

• Gold price extends the decline on Thursday, despite a risk-on market mood.
• The US Dollar tracked  US Treasury bond yields higher on reducing bets for Fed rate cuts.
• The daily RSI flips bearish again, as Gold price challenges the key 50-day SMA support at $2,324.

Gold price is seeing fresh selling near $2,330, extending the previous decline early Thursday. The US Dollar (USD) gains further ground, exerting downside pressure on the Gold price. Markets eagerly look forward to a fresh batch of US economic data and more US Federal Reserve (Fed) policymakers’ speeches for fresh policy cues.

Gold price remains at the mercy of the Fed expectations

Gold price fell into the red for the first time this week, heavily undermined by the market’s growing skepticism that the Fed will cut interest rates more than once in 2024. According to the CME FedWatch Tool, markets are pricing about 53% odds that the Fed will hold rates in September while the probability of a November rate cut stands at around 60%.

The recent hawkish Fed commentary and policymakers’ concerns on inflation persistence have diminished the odds for aggressive Fed rate cuts, fuelling the extended rally in the US Treasury bond yields while reviving the US Dollar against its major competitors.

Furthermore, mounting tensions that the Israel-Hamas conflict could turn into a wider regional conflict keep the risk-off flows intact, especially after CNN reported on Wednesday that The Israeli military said on Wednesday that it established “operational control” over the Philadelphi Corridor, a 14-kilometer (8.7 miles) strip of land along the border between Gaza and Egypt.

Looking ahead, the US Dollar will continue to draw haven demand amid rife Middle East tensions, acting as a headwind to the Gold price. Additionally, the focus remains on the second estimate of the Q1 US Gross Domestic Product (GDP) data, weekly Jobless Claims and Pending Home Sales data alongside speeches from New York Fed President John Williams and Dallas Fed President Lorie Logan.

The data publication and the Fedspeak could help the market gauge the timings of the potential Fed rate cuts this year, impacting the value of the US Dollar and the non-interest-bearing Gold price.

Gold price technical analysis: Daily chart

Gold price once again failed at the rising wedge support-turned-resistance, then at $2,372, and turned south on Wednesday.

The 14-day Relative Strength Index (RSI) snapped its bullish momentum and flipped into bearish territory, recalling Gold sellers.

At the moment, the RSI points lower below the 50 level, near 48.00, implying more downside for Gold price.

However, Gold sellers need to crack the 50-day SMA support at $2,324 to initiate a fresh downtrend toward the $2,300 threshold.

The next key downside cap is seen at the May 3 low of $2,277.

On the flip side, If Gold price bounces off the 50-day SMA at $2,324, the immediate resistance will be seen at the 21-day SMA support-turned-resistance at $2,353.

A sustained move above the abovementioned barrier at $2,372 would provide legs to the recovery, calling for a test of the next topside barrier at the May 24 high of $2,384.

Failure Following Strong Opening is Bearish Behavior

Such a bearish reaction to a strong opening is not bullish behavior. It creates further uncertainty as to whether the uptrend may have more upside to go before a deeper retracement, or if today creates a second high that leads to a bearish continuation. The 200-Day MA at 2.46, along with the recent swing low of 2.475 are the near-term price levels to watch for support. However, a retest of support around the 200-Day line could lead to a failure and a deeper retracement that targets lower price levels.

Correction Can Include a Retracement and/or Consolidation

The correction, if it does continue, could take place with a deeper retracement or consolidation. As of today, a possible consolidation range would have a high of 2.92 and a low of 2.475. But since the 200-Day line is so close to the recent swing low, they can be watched together. Notice what is happening with the purple 20-Day MA. It is rising and heading towards the 200-Day line. If natural gas further consolidates above the 200-Day line, the 20-Day line may continue to rise. It is leaning towards a possible crossing above the 200-Day line, which would be bullish overall and a sign that demand is improving. The 20-Day MA is now a match with the 38.2% Fibonacci retracement at 2.41.

20-Day MA is Current Trend Support to Watch

For the current advance the 20-Day line is the key trend support line to watch during weakness. If it remains a support boundary the chance for a continuation higher in the price of natural gas remains. Alternatively, a drop below the line increases the chance to a test of support at lower prices. The 50-Day MA at 2.03 being one of the lower price levels. That should be the maximum of a retracement, but certainly support can be seen higher.

For a look at all of today’s economic events, check out our economic calendar.

Interest Rate Concerns

Despite the recent upbeat sentiment, concerns over persistent high U.S. interest rates could limit further significant gains in oil prices. Higher interest rates elevate borrowing costs, potentially slowing economic activity and reducing oil demand. Last week, these concerns contributed to a weekly decline in crude prices.

Healthy Oil Demand Signals

UBS analyst Giovanni Staunovo noted that despite fears of softer demand growth due to high interest rates, real-time mobility data shows that oil demand remains robust. Supporting this, U.S. air travel has surged, with domestic flight seat numbers in May increasing by 5% month-on-month and nearly 6% year-on-year, surpassing 2019 levels, according to flight analytics firm OAG.

OPEC+ Meeting Expectations

Looking ahead, traders are focused on the upcoming OPEC+ meeting on June 2. The market anticipates that the group will maintain voluntary production cuts of 2.2 million barrels per day, which should support prices. The start of the U.S. summer driving season is also expected to bolster demand and prices.

Saudi Arabia’s Potential Price Cuts to Asia

In a separate development, Saudi Arabia may reduce July oil prices to Asia for the first time in five months. Sources suggest the official selling price for Arab Light crude could fall by 30 to 50 cents per barrel due to weakened Middle East benchmarks and Asian refining margins. The narrowing backwardation in the Dubai market has influenced this potential price cut, signaling eased supply tightness.

Market Forecast: Bullish Outlook

Given the anticipated OPEC+ supply cuts and robust U.S. summer demand, oil prices are expected to move higher in the short term. The pressure from sustained high U.S. interest rates and potential price adjustments by major producers like Saudi Arabia will be key factors to monitor. Overall, the market appears poised for a bullish run, dependent on these factors and broader economic conditions.

Technical Analysis

XAU/USD Current price: $2,340.30

• Federal Reserve officials’ words cooled hopes for a September interest rate cut.
• Treasury yields surged to fresh one-month highs, underpinning US Dollar demand.
• XAU/USD gains downward traction and approaches a relevant support level at $2,325.30.

Spot Gold is under selling pressure mid-American session, pressuring an intraday low of $2,334.34 a troy ounce. The US Dollar gathered near-term strength at the beginning of the day, giving up gains during European trading hours. After Wall Street’s opening, however, the USD resumed its advance with a more sustainable momentum and trades sharply up across the FX board.

Markets are in a sour mood amid comments from Federal Reserve’s (Fed) officials, further cooling down hopes for upcoming interest rate cuts this year amid stubbornly high inflation levels. Among others,  Bank of Minneapolis President Neel Kashkari said the monetary policy stance is restrictive, adding policymakers haven’t entirely ruled out additional interest-rate increases, speaking at an event in London. “I don’t think anybody has totally taken rate increases off the table,” Kashkari said. As a result, chances of a no-change in rates in September have increased to roughly 53%, according to the CME FedWatch Tool.

At the same time, easing demand for United States (US) government bonds pushed yields higher, adding to the USD’s near-term strength. The 10-year Treasury note offers 4.61%, while the 2-year note yields 4.98%, the highest in a month and close to the critical 5.0% threshold.

Data has been scarce, with investors waiting for the US Personal Consumption Expenditures (PCE) Price Index figures to be released on Friday. The Fed’s favorite inflation gauge is expected to show price pressures remained above the central bank’s goal in April, following an uptick in the previous three months.

XAU/USD short-term technical outlook

The dismal market mood prevents XAU/USD from falling further despite fresh USD demand. Technical readings in the daily chart show the pair could extend its slide. It is falling below a directionless 20 Simple Moving Average (SMA) while technical indicators gain downward traction and are piercing their midlines, which is not enough to confirm a continued slide. Finally, the 100 and 200 SMAs keep heading north, although far below the current level.

The pair turned bearish in the near term, and according to the 4-hour chart, although a continued decline seems unlikely. XAU/USD trades below all its moving averages, with a flat 20 SMA providing near-term resistance at around 2,347.10. At the same time, technical indicators turned flat after crossing their midlines into negative territory, limiting the downward scope. The pair set a relevant low last week at $2,325.30, the level to break to confirm a stepper decline ahead.

Support levels: 2,334.35 2,325.30 2,307.10

Resistance levels: 2,347.10 2,364.00 2,372.90 

XAU/USD Current price: $2,340.30

• Federal Reserve officials’ words cooled hopes for a September interest rate cut.
• Treasury yields surged to fresh one-month highs, underpinning US Dollar demand.
• XAU/USD gains downward traction and approaches a relevant support level at $2,325.30.

Spot Gold is under selling pressure mid-American session, pressuring an intraday low of $2,334.34 a troy ounce. The US Dollar gathered near-term strength at the beginning of the day, giving up gains during European trading hours. After Wall Street’s opening, however, the USD resumed its advance with a more sustainable momentum and trades sharply up across the FX board.

Markets are in a sour mood amid comments from Federal Reserve’s (Fed) officials, further cooling down hopes for upcoming interest rate cuts this year amid stubbornly high inflation levels. Among others,  Bank of Minneapolis President Neel Kashkari said the monetary policy stance is restrictive, adding policymakers haven’t entirely ruled out additional interest-rate increases, speaking at an event in London. “I don’t think anybody has totally taken rate increases off the table,” Kashkari said. As a result, chances of a no-change in rates in September have increased to roughly 53%, according to the CME FedWatch Tool.

At the same time, easing demand for United States (US) government bonds pushed yields higher, adding to the USD’s near-term strength. The 10-year Treasury note offers 4.61%, while the 2-year note yields 4.98%, the highest in a month and close to the critical 5.0% threshold.

Data has been scarce, with investors waiting for the US Personal Consumption Expenditures (PCE) Price Index figures to be released on Friday. The Fed’s favorite inflation gauge is expected to show price pressures remained above the central bank’s goal in April, following an uptick in the previous three months.

XAU/USD short-term technical outlook

The dismal market mood prevents XAU/USD from falling further despite fresh USD demand. Technical readings in the daily chart show the pair could extend its slide. It is falling below a directionless 20 Simple Moving Average (SMA) while technical indicators gain downward traction and are piercing their midlines, which is not enough to confirm a continued slide. Finally, the 100 and 200 SMAs keep heading north, although far below the current level.

The pair turned bearish in the near term, and according to the 4-hour chart, although a continued decline seems unlikely. XAU/USD trades below all its moving averages, with a flat 20 SMA providing near-term resistance at around 2,347.10. At the same time, technical indicators turned flat after crossing their midlines into negative territory, limiting the downward scope. The pair set a relevant low last week at $2,325.30, the level to break to confirm a stepper decline ahead.

Support levels: 2,334.35 2,325.30 2,307.10

Resistance levels: 2,347.10 2,364.00 2,372.90 

Rising Daily Volatility

Daily volatility in the natural gas market has escalated, with daily trading ranges expanding significantly. According to NatGasWeather, recent sessions have seen daily price movements of 10-20 cents, compared to a more stable 10-cent range in previous months. This increased volatility is contributing to uncertainty in market direction.

Weather and Demand Outlook

According to NatGasWeather, from May 29 to June 4, the southern U.S. is expected to experience very warm to hot weather, with temperatures ranging from the mid-80s to 100s in desert areas. The northern U.S. will see milder conditions, with highs in the 60s to lower 80s. However, a warm-up is anticipated next week, potentially boosting national demand for natural gas as temperatures rise into the 80s in the northern regions and remain hot in the southern areas.

Market Reactions and Storage Levels

U.S. natural gas futures rose by 3% on Tuesday due to expectations of higher demand over the next two weeks and increased LNG export activity. Despite these gains, there are indications of oversupply, with gas stockpiles about 27% above normal levels for this time of year. The June futures contract rose by 2.8% to $2.590 per mmBtu, while July futures increased by 2.0% to $2.83 per mmBtu.

Supply and Production Factors

Natural gas production in the Lower 48 states has averaged 97.7 billion cubic feet per day (bcfd) in May, down from 98.2 bcfd in April. Despite this, daily output has increased by 1.5 bcfd since early May. The rise in futures prices over the past month has encouraged some drillers to ramp up production. Nevertheless, overall production is still down around 8% in 2024 due to delayed well completions and reduced drilling activities.

Export Activities

LNG export plants have seen increased activity, with gas flows rising from an average of 11.9 bcfd in April to 12.8 bcfd in May. This is largely due to the resumption of operations at Freeport LNG’s plant in Texas. However, exports are still below the December 2023 record of 14.7 bcfd due to ongoing maintenance at various facilities.

Market Forecast

Given the current market conditions, the short-term outlook for U.S. natural gas prices remains bearish. Despite higher demand forecasts and increased LNG exports, the significant oversupply and rising production levels are likely to continue putting downward pressure on prices. Traders should remain cautious and monitor weather patterns and production data closely.

HÀ NỘI — Việt Nam’s coffee output in the 2023–24 crop year is estimated to decrease by 20 per cent compared to the previous crop year, to 1.47 million tonnes, the lowest in four years, putting pressure on Robusta supply in the world market, according to the Ministry of Agriculture and Rural Development.

Due to the impact of climate change, the dry season comes earlier than usual in Việt Nam, and prolonged hot weather causes water levels at dams in some provinces to rapidly decrease.

Fears that drought could affect crops have caused domestic coffee prices to increase sharply in the past week.

The price of coffee bean in the Central Highlands and southern provinces soared by VNĐ1,500 (US$0.059) per kilogramme, bringing the domestic purchase price of coffee bean to VNĐ114,500 – VNĐ116,000/kg.

Over the past years, coffee prices were low, prompting many farmers to gradually switch to higher value crops. However, this year’s coffee prices are experiencing a record high, and it’s expected to be an opportunity to motivate farmers to restore coffee growing area.

Việt Nam exported 756,000 tonnes of coffee, earning nearly US$2.57 billion in the first four months of the year, up 5.4 per cent in volume and 57.9 per cent in value from the same period last year. — VNS