The United Arab Emirates (UAE) is slashing exports of its Upper Zakum grade as it is diverting more volumes of the medium sour crude to a huge domestic refinery, traders and analysts have told Reuters.
ADNOC, the state oil and gas firm of one of OPEC’s top producers and exporters, is estimated to have shipped around 650,000 barrels per day (bpd) of Upper Zakum crude in March, compared to a monthly average of around 940,000 bpd throughout 2023, according to Rystad Energy data cited by Reuters.
At the same time, ADNOC has exported more volumes of the lighter and sweeter grade Murban to replace lower volumes of Upper Zakum, according to traders and analysts.
More Upper Zakum crude is now being run at ADNOC’s refurbished Ruwais refinery, which has a capacity to process 837,000 bpd of crude.
Back in 2018, ADNOC said it would invest $3.1 billion to introduce crude processing flexibility at its Ruwais oil refinery. Since then, the refinery has been modified to enable ADNOC’s Ruwais Refinery-West complex to process up to 420,000 bpd of Upper Zakum crude or similar crude types. This has freed more volumes of the UAE’s Murban crude, which fetches a higher price on the global oil markets, to be utilized for export sales.
Commenting on the refinery modification at the time, ADNOC said that “we can maximise the benefit of price differentials to enhance refinery margins, improve the middle distillate products and release valuable Murban crude into the market.”
ADNOC began using Upper Zakum at its domestic refinery in September last year, traders told Reuters.
Later in the autumn of 2023, sources familiar with ADNOC’s plans told Reuters that the Abu Dhabi firm had already notified some of its term customers that it would reduce the volume of Upper Zakum supply in 2024.
On the other hand, the UAE has said it would boost supply of the more expensive Murban crude, especially as the Middle Eastern producer won a higher quota under the OPEC+ agreement for 2024.
“Barrel-for-barrel, Murban brings more revenue for equal compliance,” Adi Imsirovic, director of Surrey Clean Energy, told Reuters.
Importers of the UAE’s medium sour grade Upper Zakum, most of all China, will now have to scour the market for other sources of heavier crude.
U.S. natural gas producers are slashing production in response to multi-year low prices. But they are also looking beyond the current slump, preparing to turn on more output by flexible operation of their inventory of wells.
“Natural gas is currently pricing at or below costs of production,” an executive at an exploration and production company said in comments in the quarterly Dallas Fed Energy Survey released this week.
Prices are historically low due to weak winter demand amid milder weather, record output at the end of 2023, and higher-than-average natural gas stocks.
Working natural gas stocks in the week to March 22 were 41% more than the five-year average and 23% higher than last year at this time, per the latest EIA data.
The oversupply and low prices have prompted many producers to start reducing production. But some are also stocking up inventories of wells ready to start pumping – or to be turned in line – as soon as prices rebound. Producers expect natural gas prices to recover next year amid growing demand for LNG exports and new LNG export plants that are slated to begin operations in 2025.
“All of us in the natural gas business are pinching as many pennies as we can right now,” Josh Viets, Executive Vice President and Chief Operating Officer at Chesapeake Energy, told the audience at Hart Energy’s DUG GAS+ Conference & Exhibition 2024 in Louisiana this week. Related: Against All Odds American Oil Soars Under Biden
But Chesapeake Energy, set to become the top U.S. natural gas producer after the planned merger with Southwestern Energy, is also deferring production from around 80 wells this year, which would give it up to 1.0 bcf/d of productive capacity available from deferred turn in line wells (TILs) by the end of 2024.
“The way I like to think about it is we’re using the reservoir as storage,” Viets told the conference, as carried by Bloomberg.
“When the market says, ‘hey, I need more gas,’ we’ll be in a position to quickly restore that to help meet the needs of consumers.”
In the Q4 2023 earnings release in February, Chesapeake Energy said it would be building productive capacity to align with consumer demand. By year-end, the company plans to have deferred around 35 drilled but uncompleted wells (DUCs) and about 80 TILs. A measured approach to production activation would be responsive to market demand, Chesapeake noted.
Other U.S. natural gas drillers, including the current top producer EQT Corporation, have also reduced output in response to the low domestic prices.
“The low prices we are experiencing now are causing us to tuck it in and keep our powder dry,” an executive at an E&P company said in comments to the Dallas Energy Survey.
“While companies are certainly protective of cash flow, they all want to be ready to service the next wave of LNG projects coming online in 2025,” Erin Faulkner at Enverus wrote this week.
Despite multi-year low natural gas prices in the United States, domestic producers continue to be optimistic about the long-term prospects of gas as a fuel, both in America and abroad.
Recent deals for LNG supply and midstream expansion point to an optimistic view in the industry about global gas demand and the role the U.S. could play in meeting said demand, despite the halt to LNG permit reviews.
Chesapeake, for example, signed in February its first LNG Sale and Purchase Agreements to buy around 0.5 million tonnes per annum of LNG from Delfin LNG at a Henry Hub-linked price with a targeted contract start date in 2028. Chesapeake will then deliver the LNG to commodity trader Gunvor on an FOB basis with the sales price linked to the Japan Korea Marker (JKM) for a period of 20 years.
Pipeline giant Enbridge announced this week a joint venture to build and operate natural gas pipelines connecting gas supply from the Permian to the U.S. Gulf Coast to tap into growing LNG export demand.
Henry Hub prices are set to rise by the end of 2024, and further still in the medium term, according to executives polled in the Dallas Fed Energy Survey.
Survey participants expect a Henry Hub natural gas price of $2.59 per million British thermal units (MMBtu) at year-end, compared to an average price of $1.44 per MMBtu through most of March when the survey responses were collected. Executives see Henry Hub prices at $3.18 per MMBtu two years from now, and at $3.94 per MMBtu five years from now.
Following a great dinner at home recently, Cindy asked, “So, Doug, if you were preparing tomorrow night’s meal, what would you make?” Hmn…My response, “Remember that time I made a baloney omelet?” I was immediately disqualified. Producing a meal requires skill, planning, experience, and common sense — just like producing crops. No baloney about that!
Recent price activity for CBOT wheat has been extremely disappointing. During the first half of December 2023, July CBOT rallied to $6.66 in the midst of a 3-day buying spree when China bought 41 million bushels of US wheat. Fast forward to the week of March 11. Disappointment was plentiful when in 3 successive days China announced several cancelations of U.S. wheat purchases totaling 18 million bushels. That same week China was also canceling wheat purchases from Australia and France. Corn, soybeans, and wheat all took huge price declines from December into February. While corn and soybeans reached contract lows the week of Feb. 26, wheat continued to move lower into the first half of March when July CBOT reached its most recent contract low at $5.37 ¾. It made multiple new contract lows in both February and March.
U.S. wheat producers last fall were obviously optimistic on prices as total acres estimated by USDA for 2023-2024 were expected to reach 49.6 million acres, up 3.8 million acres or 8% from 2022-2023. While many producers were applying nitrogen the last half of March and into early April, some producers were at least contemplating destroying wheat due to the price declines since December. Instead, they would plant corn or soybeans.
There continues to be growing confusion on world soybean imports into China. On one hand, the March USDA WASDE Report detailed China would be importing 105 million tons, a furious appetite of world soybeans for the current marketing year which ends August 31. That is an increase of 3 million tons from the Feb. 8 WASDE Report. The 105 million tons of soybean import is a monstrous number, the equivalent of 3.858 billion bushels, using nearly 93% of U.S. soybean production from 2023 if China imported exclusively U.S. soybeans. Of course, that will never happen but the comparison is mentioned only to highlight the vast import number. Here’s the confusion. To date, China has been buying very little of Brazil soybeans, while the latest U.S. soybean sale of 11 million bushels was on Jan. 19.
Into early March, Brazil farmers were extremely disappointed with the snail-like pace of soybean sales to China. Noticeably absent from the headlines has been any mention of Brazil soybean sales to China, which weeks earlier accounted for only 3 to 8 cargoes, roughly 2 million bushels per cargo, each week on several instances in January and February. Brazil’s soybean harvest to date was progressing faster than normal. It proved to be frustrating that soybean prices were declining along with the basis also widening as harvest progressed.
May 2024 CBOT soybeans reached a recent high at $12.17 ½ on March 14 up 20 cents on the day. That morning, Brazil farmers were heavy sellers of soybeans, putting an end to the mid-morning rally, as soybeans were down one penny on the close. Evidently, the 2-week rally of nearly 90 cents caught lots of attention when it was recognized for the steep climb in just two short weeks from its contract low of $11.28 ½ on Feb. 29.
Why is there a big spread between USDA and Conab, Brazil’s food agency on Brazil’s production numbers for soybeans and corn? USDA projected Brazil’s soybean production at 155 million tons and the Brazil corn production at 124 million tons. Conab has projected the Brazil soybean production at 146.8 million tons with the Brazil corn production at million 112.7 tons. You would think the numbers would be much closer.
Last month I was with a group from the Fairfield Soil & Water Conservation District touring two solar farm projects in Ross County. We were able to see their construction methods which included racking systems and panel placements that followed the contour of the topography. Their use eliminated the need for moving huge amounts of soil to have table top consistency across the project. In addition, the projects utilized a special mix of grasses grown onsite before the project started, then baled for future seeding efforts. This eliminates the need for straw to be imported from outside the project area, preventing plant species not already present at the project sites.
Thought for the day, “When you don’t know what you’re talking about, it’s hard to know when you’re finished.” – Tom Smothers.
Malaysian state-run oil company Petronas has set the official selling price of March-loading Malaysian crude oil (MCO) grades (OSP/MY) at $94.78, up by $1.65 from the previous month, according to a price document issued on Monday.
MCO grades include Labuan, Miri, Kikeh and Kimanis.
OSPs for the Malaysian grades in dollars per barrel:
Oil production in Ohio hit a record 27.8 million barrels in 2023, up 41% from 2022, according to researchers at the Levin College of Public Affairs and Education at Cleveland State University who have tracked production since 2011. In December alone, eastern Ohio oil wells pumped 93,000 barrels of crude, up one third from December 2022, according to federal data.
Ohio has become one of the top 10 oil producers in the country. It already was one of the biggest producers of natural gas.
“We always thought it was a gas play,” said Mike Chadsey, spokesman for the Ohio Oil & Gas Association. “Now it may very well become an oil play.’’
Utica shale investment tops $100 billion
It’s been more than a decade since drilling took off in eastern Ohio, driven by a controversial technique known as hydraulic fracturing, or “fracking” that environmentalists have criticized.
The number of producing oil and gas wells in Ohio now tops 3,100, according to the Cleveland State researchers. Investment has been estimated at least at $105 billion.
Most of the money has been spent on drilling while the rest has been spent on such things as pipelines, transportation, storage, processing and natural gas-fired power plants.
Production has been concentrated in 18 eastern counties, but it has been the strongest in a handful of counties near the Ohio River − Belmont, Harrison, Jefferson, Monroe, Carroll, Guernsey, Columbiana and Noble, according to Cleveland State’s reporting.
Even with the surge of oil production, the Utica continues to be a region dominated by natural gas, where 2.2 trillion cubic feet of gas was produced last year.
Crude made up about 7% of the state’s energy production last year, the researchers said.
What is driving oil growth?
Price and technology are key factors why more oil is being produced in Ohio.
Higher oil prices are making investments in the region profitable with oil prices climbing above $80 a barrel recently. Meanwhile, the warm winter hurt demand for natural gas and has been a drag on prices.
Natural gas produced in the Utica also trades at a discount because it’s hard to transport it from the region to market.
“Oil is more appealing,” said Mark Henning, research supervisor at the Energy Policy Center at the Levin School. “There’s a greater return on capital.”
Meanwhile, improved technology is allowing companies to access areas that in the past may have not been seen as productive as they are today, said Andrew Thomas, executive in residence at the Levin College.
“They can produce in places where they couldn’t produce 15 years ago with the technology they’ve developed,” he said.
The biggest jumps in oil productions are in Carroll and Guernsey counties. Jefferson, Belmont and Columbiana counties have also seen strong gains.
Carroll County had the most oil production last year in Ohio with 9.7 million barrels, Henning said. Guernsey County was second with 9.3 million barrels and Harrison County was third at 6.5 million barrels.
“There’s a lot more oil in Carroll than originally thought,” Thomas said.
Oil company EOG Resources, a newer company in the region, has told investors that it has accumulated leases on about 430,000 acres in the region.
“Now, just a reminder to the group, we’re investing at a $40 oil price,” EOG President Billy Helms said at a conference in January. “So we’re very comfortable with our investments and being able to generate the returns we’re wanting. And in today’s prices (about $81 a barrel Wednesday), those are monstrous returns. And that’s gone to help improve the financial performance of the company. So overall, that’s kind of how we think about it.”
EOG produced 1.3 million barrels of oil in 2023 in Ohio, with the highest producing wells in Harrison and Carroll counties, Henning said.
Encino Energy, Ascent Resources, Gulfport Energy, Rice Drilling, Southwestern Energy and Antero Resources account for 91% of the oil and gas production in the Utica in 2023, according to Cleveland State.
How long will it last?
Production of oil and gas in the Utica is still in the early stages and could go on for decades, Thomas said.
Even areas where oil and gas companies have fracked can in theory be fracked again to reach additional supplies of oil and gas, he said.
“We really haven’t developed the oil part yet,” he said.
EOG’s Helms said the company continues to be excited about the results the wells are getting.
“As a company, we’ve collected a lot of technology and a lot of data, the ability to analyze wells in the past and the future, apply EOG’s technology to those productive metrics … and to understand what’s the uplift we could get from applying those new technologies and these new plays,” he said at the conference.
“And the Utica is a textbook example where we took a look at some of the older wells in that play, analyzed it with our approach, and determined what the uplift could be.”
Israeli Defence Minister Yoav Gallant (L) visit the troops participating in Gaza Strip and made a situation assessment with the commanders in Rafah, Gaza on March 13, 2024.
Ariel Hermoni | Anadolu | Getty Images
Crude oil futures fell for a second day Tuesday as the recent rally paused while traders took stock of where the conflict in Middle East was heading.
The West Texas Intermediate contract for May delivery fell 48 cents, or 0.56%, to $85.95 a barrel. The June Brent futures contract lost 32 cents, or 0.35%, to $90.06 a barrel.
Crude prices settled lower Monday after Israel reduced its forces in Gaza over the weekend, suggesting the country’s military campaign might transition to a more limited phase.
But Barclays head of equity derivatives strategy Stefano Pascale said there are still upside risks to oil prices, particularly from geopolitical tensions in the Middle East, despite the recent rally taking a pause.
“Further melt-up may reawaken inflationary concerns, derailing the equity rally,” Pascale told clients in a note Tuesday. Investors will be closely watching the March consumer price index reading on Wednesday to see how oil prices have impacted headline inflation.
Oil Prices, Energy News and Analysis
Oil rallied more than 4% last week as Israel and Iran teetered on the brink of a direct confrontation after Tehran’s consulate in Damascus was destroyed in a missile attack.
“The conflicts in the Middle East increase the risk of a wider regional conflict, which could have implications for oil supply, but it is important to note that Iran has, so far, refrained from getting directly involved in the conflict and OPEC spare capacity is currently elevated,” Amarpreet Singh, energy analyst at Barclays, told clients Friday.
Israel Prime Minister Benjamin Netanyahu vowed late Monday to press on with an offensive against the southern city of Rafah on the Egyptian border, saying a date had been set for the operation.
“This victory requires entry into Rafah and the elimination of the terrorist battalions there. It will happen —there is a date,” Netanyahu said in an address.
The U.S has warned Israel against launching an offensive against Rafah, where more than 1 million Palestinians who have fled fighting elsewhere in Gaza are taking refuge.
Ceasefire negotiations also appeared deadlocked in Cairo, with Hamas saying Israel’s proposal did not meet Palestinian demands.
WTI has gained 20.8% this year while Brent is up more than 17% as geopolitical tensions mount against the backdrop of rising demand and OPEC+ production cuts that are expected to push the market into a supply deficit this year. Barclays expects a 400,000 barrel per day deficit for 2024.
Oil prices rose on Tuesday after hopes diminished that negotiations between Israel and Hamas would lead to a ceasefire in Gaza amid concerns the lingering conflict could potentially disrupt supply from the key Middle East producing region.
Brent crude futures rose 14 cents to $90.52 a barrel by 0610 GMT. U.S. West Texas Intermediate (WTI) crude was 10 cents higher at $86.53.
A fresh round of Israel-Hamas ceasefire discussions in Cairo had ended a multi-session rally on Monday, leading Brent to its first decline in five sessions and WTI to its first in seven on the prospect that geopolitical risks could ease.
But Israeli Prime Minister Benjamin Netanyahu said on Monday an unspecified date had been set for Israel’s invasion of the Rafah enclave in Gaza.
That is “ending the hopes that briefly gripped the market yesterday that geopolitical tensions in the region might be easing,” Tony Sycamore, a market analyst with IG, wrote in a note.
Hamas said early on Tuesday that Israel’s proposal it received from Qatari and Egyptian mediators did not meet any of the demands of Palestinian factions. But Hamas said it would study the proposal before responding to the mediators.
Without an end to the conflict, there is an elevated risk that it involves other countries in the region, especially Iran, a major Hamas backer and the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC).
An Iranian response to Israel’s suspected attack last week on its consulate in Syria “could drag the oil market into the conflict, after being largely unimpacted since Hamas’s attack on Israel,” ANZ analysts said in a client note.
Tehran said that it would take revenge after an airstrike killed two of its generals and five military advisors in Damascus, although Israel has not claimed responsibility for the attack.
“The positive geopolitical risk premium is indeed supporting the current medium-term uptrend phase of oil,” said Kelvin Wong, a senior market analyst at OANDA in Singapore.
Broader fundamentals are supportive of prices as well, the ANZ analysts said. India’s fuel demand hit a record high in the 2024 fiscal year driven by higher gasoline and jet fuel consumption, data showed on Monday. An improvement in Chinese manufacturing activity announced last week is also expected to boost fuel demand.
This week, the market will be watching inflation data due from the U.S. and China for further signals on the economic direction of the world’s top two oil consumers.
In the Americas, Mexico’s state oil company Pemex said it would reduce crude exports by 330,000 barrels per day so it can supply more to domestic refineries, cutting the supply available to the company’s U.S., European and Asian buyers by one-third.
Home » Dryness in US Plains, Russia pulls wheat higher
Source: Sosland Publishing Co.
Recap for April 6
Dry weather concerns for the US and Russian crops bolstered most wheat futures Monday, as did concerns about Russia delaying shipments. Pressuring soybean futures was lackluster demand from China, the largest global importer, and intense export competition from Brazil. Corn futures edged higher ahead of Thursday’s supply-demand report in which traders expect the USDA to lower its forecast for 2024 corn carryover. May corn added 1¼¢ to close at $4.35½ per bu. ChicagoMay wheat fell 1½¢ to close at $5.65¾ per bu; the December contract and beyond edged higher. Kansas CityMay wheat added 3¢ and closed at $5.85¼ per bu. MinneapolisMaywheat added 2¼¢ and closed at $6.50¼ per bu. May soybeans were down 3½¢ to close at $11.81½ per bu. May soybean meal was up $2.90 to close at $336 per ton. May soybean oil lost 0.99¢ to close at 47.9¢ a lb.
US crude oil prices declined Monday. The May West Texas Intermediate light, sweet crude future dropped 48¢ to close at $86.43 per barrel.
US equity markets were mixed but nearly flat Monday as treasury yields hit their highest levels in months and investors awaited fresh inflation data. The Dow Jones Industrial Average subtracted 11.24 points, or 0.03%, to close at 38,892.8. The Standard & Poor’s 500 eased 1.95 points, or 0.04%, to close at 5,202.39. The Nasdaq Composite edged up 5.44 points, or 0.03%, to close at 16,253.96.
The US dollar index reverted Monday to the downside pattern of the previous week.
US goldfutures continued to rally Monday. The April contract added $6 to close at $2,331.70 per oz.
Recap for April 5
US crude oil prices rose more than a dollar per barrel during trading Friday as markets closely watched for signals of direct conflict between Israel and Iran that could tighten crude supplies. Both Brent crude and WTI oil prices trimmed gains by the close but settled at their highest levels since October. The May West Texas Intermediate light, sweet crude future added 32¢ to close at $86.91 per barrel.
Wheat futures climbed Friday, some contracts to one-month highs, in technical trading and short covering with support from Black Sea geopolitical tension and deteriorating crop conditions in France. Technical trading and short covering boosted soybean futures, though the commodity was mixed for the week on lackluster demand and increasing supplies from South America’s harvest. Corn futures dropped on ample supplies and a favorable outlook for Midwest planting later this month. May corn dropped 1¢ to close at $4.34¼ per bu; May 2025 and beyond posted gains. ChicagoMay wheat added 11¢ to close at $5.67¼ per bu. Kansas CityMay wheat added 4¾¢ and closed at $5.82¼ per bu. MinneapolisMaywheat added 1¾¢ and closed at $6.48 per bu. May soybeans were 5¢ higher and closed at $11.85 per bu; later months were mixed. May soybean meal was down 40¢ to close at $333.10 per ton. May soybean oil gained 0.74¢ to close at 48.89¢ a lb.
US equity markets resumed their rallies Friday after the Labor Department said US employers added a seasonally adjusted 303,000 jobs in March, significantly more than the 200,000 economists expected. The unemployment rate slipped to 3.8% versus 3.9% in February, in line with expectations. The Dow Jones Industrial Average added 307.06 points, or 0.8%, to close at 38,904.04. The Standard & Poor’s 500 gained 57.13 points, or 1.11%, to close at 5,204.34. The Nasdaq Composite jumped 199.44 points, or 1.24%, to close at 16,248.52.
The US dollar index broke its three-day losing streak with a higher close Friday.
US goldfutures resumed their rally Friday. The April contract added $36.90 to close at $2,325.70 per oz.
Recap for April 4
Soybean futures were pressured Thursday by lower-than-expected export sales and abundant South American production. Kansas City and Chicago wheat futures ended mixed while Minneapolis wheat futures closed with solid gains. Traders processed news that a Russian grain trader had refuted prior reports that some of its exports were being restricted by local authorities. Strong export sales gave support to corn futures, as did a weakening US dollar, but gains were limited by ample supplies and a forecast for good planting weather. May corn added 3½¢ to close at $4.35¼ per bu. ChicagoMay wheat ticked up ¼¢ to close at $5.56¼ per bu; later months were narrowly mixed. Kansas CityMay wheat declined 3¢ and closed at $5.77½ per bu; later months were narrowly mixed. MinneapolisMaywheat added 6¾¢ and closed at $6.46¼ per bu. May soybeans were 2¼¢ lower and closed at $11.80 per bu; March 2025 and beyond were slightly higher. May soybean meal was up $3.50 to close at $333.50 per ton. May soybean oil lost 0.7¢ to close at 48.15¢ a lb.
US crude oil prices continued to climb Thursday. The May West Texas Intermediate light, sweet crude future added 1.16¢ to close at $86.59 per barrel.
US equity markets dropped on Thursday after a Federal Reserve official alluded to the possibility that interest rate cuts may not happen in 2024. Rising oil prices and escalating tensions in the Middle East also pressured stocks. The Dow Jones Industrial Average fell 530.16 points, or 1.35%, to close at 38,596.98. The Standard & Poor’s 500 lost 64.28 points, or 1.23%, to close at 5,147.21. The Nasdaq Composite tumbled 228.38 points, or 1.4%, to close at 16,049.08.
The US dollar index closed lower for a third straight day Thursday.
US goldfutures ended their rally streak Thursday. The April contract gave back $5.60 to close at $2,288.80 per oz.
Recap for April 3
Wheat futures launched a rebound Wednesday after sliding lower since the new week, month and quarter began. Lifting wheat was a round of short covering, technical trading, a weakening dollar and geopolitical news after Russia halted exports on some ships owned by one of the biggest local grain trading houses. Corn futures, too, firmed on short covering as the dollar weakened, though gains were limited by ample supplies and forecasts for good planting weather later this month on the heels of rainy, snowy conditions this week that improved soil moisture. Also, technical buying and short covering were behind soybean futures’ bounce from one-month lows induced by lackluster demand and increasing South American supplies. May corn added 5¼¢ to close at $4.31¾ per bu. ChicagoMay wheat jumped 10¾¢ to close at $5.56 per bu. Kansas CityMay wheat soared 17¼¢ higher and closed at $5.80½ per bu. MinneapolisMaywheat added 12¢ and closed at $6.39½ per bu. May soybeans advanced 8¼¢ to close at $11.82¼ per bu. May soybean meal was up $1.70 to close at $330 per ton. May soybean oil added 0.25¢ to close at 48.85¢ a lb.
US crude oil prices hit the highest levels since late October Wednesday on concerns about supply disruptions due to Ukraine’s attacks on Russian refineries and a vow of revenge against Israel by Hamas-backer Iran, the third-largest oil producer in the Organization of the Petroleum Exporting Countries cartel. The May West Texas Intermediate light, sweet crude future added 28¢ to close at $85.43 per barrel.
US equity markets were mixed Wednesday, the Dow industrial index slipping while the Nasdaq and S&P 500 gained, the latter snapping a two-day losing streak after Fed chairman Jerome Powell said a strong economy hasn’t changed the expectation interest rate cuts will be warranted later this year. The Dow Jones Industrial Average eased 43.10 points, or 0.11%, to close at 39,127.14. The Standard & Poor’s 500 added 5.68 points, or 0.11%, to close at 5,211.49. The Nasdaq Composite added 37.01 points, or 0.23%, to close at 16,277.46.
The US dollar index closed lower again Wednesday.
US goldfutures jumped higher again Wednesday. The April contract added $33.40 to close at $2,294.40 per oz.
Recap for April 2
US wheat futures continued lower Tuesday, a day after the USDA said winter wheat was in the best early spring shape since 2019. Beneficial rains in the forecast for the dry southern Plains added pressure as did cheap grain on the global market that limited US export demand. Corn futures also dipped as forecasts indicated good spring planting weather ahead that eased concerns about the USDA’s lower-than-expected acreage outlook issued late last week. Soybean futures trended higher before breaking through previous support levels, which initiated technical selling and lower closing prices. May corn fell 9¢ to close at $4.26½ per bu. ChicagoMay wheat declined 11¾¢ to close at $5.45¼ per bu. Kansas CityMay wheat fell 12¼¢ and closed at $5.63¼ per bu. MinneapolisMaywheat dropped 7¼¢ and closed at $6.27½ per bu. May soybeans shed 11¾¢ to close at $11.74 per bu. May soybean meal was down $5.10 to close at $328.30 per ton. May soybean oil added 0.36¢ to close at 48.6¢ a lb.
US crude oil prices were higher again Tuesday, pushing the Brent benchmark above $89 a bu for the first time since October. Support came from escalating Middle East conflict and a Ukrainian drone strike on one of Russia’s biggest refineries. The May West Texas Intermediate light, sweet crude future added $1.44 to close at $85.15 per barrel.
The US dollar index closed lower Tuesday.
US goldfutures jumped higher Tuesday. The April contract added $24.50 to close at $2,261 per oz.
US equity markets closed lower Tuesday, pressured by climbing bond yields, rising crude oil prices and widening doubts that the Federal Reserve fully contained inflation. The Dow Jones Industrial Average dropped 396.61 points, or 1%, to close at 39,170.24. The Standard & Poor’s 500 fell 37.96 points, or 0.72%, to close at 5,205.81. The Nasdaq Composite fell 156.38 points, or 0.95%, to close at 16,240.45.
In recent days, we have witnessed the scene of domestic coffee prices soaring rapidly, continuously breaking decades-old records to reach a new peak of nearly 105,000 VND/kg. The price level hasn’t stopped here but is forecasted to continue rising in the future. High prices combined with a shortage of supply have pushed many coffee businesses onto the path of losses. The equation to escape losses has become more difficult and urgent than ever.
Coffee prices continue to soar
As of April 9, 2024, coffee prices are ranging between 104,000 and 104,500 VND/kg (See today’s coffee prices in each locality at Today’s coffee prices, view today’s accurate coffee prices). The beginning of April marks the peak period of the dry season in the Central Highlands provinces, with this year’s drought forecasted to be more severe than in previous years. Water levels and flows in rivers and streams are gradually decreasing and maintained below-average levels for many years. Thousands of hectares of crops are withering due to water shortages. The scarce rainfall, dry conditions, and water shortages during the dry months of 2024 will significantly impact the production activities and livelihoods of the people. Coffee production, which is already low, is further expected to decrease this year. Concerns about the supply have driven coffee prices to unprecedented levels.
Many coffee businesses are seeking ways to escape losses
The sudden surge in coffee prices has caught many businesses off guard because contracts are usually signed when coffee prices are low, without much fluctuation as seen currently. Businesses are forced to fulfill contracts they have already signed in a situation where there is no coffee to buy and prices are “skyrocketing.”
Many businesses are struggling to fulfill previously signed contracts
According to Mr. Phan Minh Thong, Chairman of Phuc Sinh Group – one of the leading coffee export companies in Vietnam, in the first three months of the season, export companies, foreign traders, and FDI often sell up to 50% of their production in advance and buy during the season. However, companies sell at low prices in advance, and when companies buy, coffee prices are continuously pushed up. In November 2023, prices ranged from 59,000 to 60,000 VND/kg, then in December 2023, it was 62,000 VND/kg and 69,000 VND/kg. By January 2024, it was 70,000 VND/kg and 82,000 VND/kg by early March, reaching 86,000 VND/kg and up to 94,500 VND/kg.
For each ton of coffee, companies have to bear losses of tens of millions of VND, while coffee contracts range from hundreds to thousands of tons. The level of damage is extremely high, incalculable, causing many small and medium-sized enterprises unable to sustain themselves.
Traders also face many risks when buying from farmers, and when farmers see high prices and refuse to deliver the goods they have signed contracts for, traders incur significant losses or bankruptcy, and they also lack financial resources to deliver to export companies or foreign companies for the contracts they have signed. Many exporters are demanding thousands or tens of thousands of tons they have already bought or even received deposits for but have not been delivered, facing mounting difficulties.
As manufacturing enterprises, they face even more difficulties such as low capital turnover. They have to increase various expenses, such as production costs, labor costs, bank loan interest costs, transportation costs, even double compared to traders, machinery depreciation costs, opportunity costs,…
What are coffee businesses doing to address immediate challenges?
A volatile market is the time when businesses need to change their procurement plans and strategies. To ensure the supply from farmers, businesses may have intensified their cooperation with farmers by investing in fertilizers, providing them with loans to cover living expenses as well as cultivation costs. By applying this method, Bao Anh company still ensures a supply of 10,000 tons per year for Vinh Hiep each year and partially meets the demand for other leading export businesses in Vietnam amid the broken coffee supply chain.
The surge in prices coupled with the risk of not being able to collect goods has put many businesses, especially small and medium-sized ones, in a dilemma. Supply chain integration is seen as a useful solution to help businesses overcome this situation.
Stay tuned to the News section for more useful information!
The price of platinum opened at $984.87 per ounce, as of 9 a.m. That’s up 4.12% from the previous day and down 0.29% from the beginning of the year.
The lowest trading price within the last day: $954.39 per ounce. The highest platinum spot price in the last 24 hours: $986.39 per ounce.
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Platinum spot price
Platinum price chart
The chart below shows how the spot price of platinum is trending over the year.
Year to date, platinum is down 0.29%, as of 9 a.m. The 52-week high reached $1,135.49 on April 21, 2023, and the 52-week low dropped to $843.15 on Nov. 10, 2023.
The precious, silvery-colored metal is priced in U.S. dollars. This means that the fluctuations in the value of the U.S. dollar can impact its price.
The price of XPT/USD reflects the value of one ounce of platinum in U.S. dollars, and it is traded like traditional currency pairs. Because platinum trades occur globally, investors can also track the spot price of platinum in other currencies, such as XPT/EUR for euros and XPT/GBP for British pounds.
Factors that can influence the price of platinum include changes in demand, geopolitical events and tensions in major platinum-producing countries. Of course, investor opinion and speculation can also affect prices.
Precious metals spot prices
Platinum is one of four main precious metals investors can trade via physical bullion, exchange-traded products or futures contracts. Gold, silver and palladium spot prices are also updated 24/7 in various currencies.
Platinum vs. gold price
Currently, platinum trades at $984.87 per ounce, as of 9 a.m., compared to gold, which trades at $2,349.44 per ounce. Year to date, platinum prices are down by 0.29% and gold prices are up by 13.70%.
“Historically, platinum has often been more expensive than gold due to its relative scarcity and unique properties. However, the price of platinum can fluctuate in response to changing market conditions,” said John Bergquist, president of Elysium Financial.
Political instability and supply disruptions in major platinum-producing regions like South Africa and Russia affect prices.
The silvery metal also tends to be a less reliable store of value than gold.
While historically, platinum has been pricier than gold, that flip-flopped briefly in August 2011. When looking at the gold-to-platinum price ratio, platinum was priced above gold from January 2013 until December 2014. Since then, gold has more than doubled its value compared to platinum prices.
Platinum price history
Like any metal, the price of platinum can be volatile. Various factors affect it, the most significant being supply and demand dynamics. Other factors, such as economic conditions, geopolitical events, and changes in industrial and investment demand, can also impact the price of platinum.
At the start of the new millennium, the precious metal’s spot price was around $420. Fast-forward over 20 years, and the current price of platinum has more than doubled.
The spot price soared to new heights, trading in February 2008 at around $2,200 per troy ounce. In November of that year, the price returned to less than $1,000.
Platinum’s spot price has fluctuated between around $800 to $1,400 for the past decade, hovering around the $1,000 threshold on average.
Platinum prices today remain historically low. Prices dropped as low as $623.50 in March 2020 during the COVID-19 pandemic. While prices have recovered, platinum is nowhere near its all-time high of $2,213.20, set on March 3, 2008.
Platinum futures
Futures contracts let investors speculate on the future price movements of an underlying asset like platinum.
These financial contracts represent an agreement between two parties to trade a set amount of platinum at a specified price at a future date. They can be settled by exchanging the physical commodity or cash in place of the commodity.
Futures contracts differ from spot prices in that futures contracts establish a future price whereas spot prices are for immediate delivery. These contracts can be fulfilled by trading the physical commodity or exchanging cash in place of the underlying asset. They are usually traded through an exchange.
Platinum as an investment
The automotive industry creates the highest demand for platinum. Platinum is a key component in manufacturing catalytic converters, which are responsible for reducing vehicle emissions.
In addition to the automotive industry, platinum is widely used in the industrial industry to create medical products, nitric acid and glass. As the demand for these products rises, so does the price of platinum.
It is anticipated that platinum will play an essential role in the development of hydrogen technology. Platinum is used to produce carbon-free hydrogen from renewable energy.
“If hydrogen-based power meets expectations in the coming decade, then one could expect a material demand tailwind in platinum,” said Stash Graham, managing director of Graham Capital Wealth Management.
Precious metals such as platinum, gold and silver have long been used to diversify an investment portfolio.
When choosing investments, it is crucial to consider potential drawbacks. While there may be an increase in the demand for platinum, other factors may throw a wrench in the investment benefits.
When considering an investment, it is essential to consider your current holdings and individual financial goals.
Platinum is rarer than both silver and gold, which could make it attractive to investors seeking a scarce metal. This practice helps protect other holdings, such as stocks, in an economic downturn. Investing in platinum can help balance inflation and economic uncertainties.
Frequently asked questions (FAQs)
The highest platinum price was $2,213 on March 3, 2008. This notable high can be attributed to critical supply issues in South Africa, the world’s largest platinum producer. Both geopolitical and economic factors played a role in this price hike during the recession.
The London Bullion Market Association is responsible for price auctions of platinum and other industrial metals.
