🍎 🍕 Less apples, more pizza 🤔 Have you seen Buffett’s portfolio recently?Explore for Free

US Crude Oil: Brent Time Spreads Strengthen as Inventories Exceed Expectations

Published 02/22/2024, 05:09 AM
HG
-
LCO
-
CL
-
CC
-
ZS
-
MZN
-

US crude oil inventories increased more than expected last week, marking the second straight week of larger builds

Energy: Brent Time Spreads Strengthen

The oil market managed to move higher in the morning trading session amid indications of a tightening crude market. ICE Brent traded above US$83/bbl while the prompt spread also managed to see its backwardation widen to US$0.95/bbl, hovering near three-month highs. However, the API numbers remained largely bearish for the oil market, reporting a large build over the last week.

US oil inventory numbers overnight from the API show that crude inventories increased significantly by 7.2MMbbls last week, compared to the average market expectations for a build of around 4MMbbls/d. Similarly, Cushing crude oil stocks are reported to have increased by 0.7MMbbls. However, product inventories remained mixed, with gasoline stocks growing by 0.42MMbbls, while distillate stocks fell by 2.9MMbbls over the week ending 16 February. The more widely followed EIA inventory report will be released later today.

Metals: Zinc Ends 2023 In Surplus

The recent data from the International Lead and Zinc Study Group (ILZSG) show that the global zinc market ended 2023 with a supply surplus of 205kt compared to a deficit of 73kt a year earlier. Total refined production rose by 3.8% year-on-year to 13.9mt (driven by higher Chinese output), while total consumption increased 1.7% year-on-year to 13.7mt in 2023. As for lead, total production reported gains of 2.8% YoY to 12.85mt, while consumption rose by 1% YoY to 12.76mt last year. The lead market was estimated to have seen a supply surplus of 92kt in 2023, compared to a supply deficit of 134kt during the same time in the previous year.

Meanwhile, Vale said that the operating license for its Sossego mine (its second largest copper mine) located in Para, Brazil has been suspended by the State of Para's environmental secretary. The company didn’t mention the reason for the suspension and said that it complies with conditions and socio-environmental controls of its activity. Vale produced around 66.8kt of copper in the Sossego mine last year.

Agriculture: Ghana Lowers Cocoa Production Estimates

Recent estimates from the Ghana Cocoa Board show that cocoa production in the country is likely to fall to around 650kt-700kt in 2023/24, lower than the previous estimates of 850kt. This would be the lowest annual output in 14 years. The revision in the estimates is mainly due to unfavorable weather conditions and smuggling. Cocoa prices jumped over 4% yesterday to settle at the highest level on record amid expectations for global supply shortages.

In its latest report, the Rosario Board of Trade revised Argentina’s soybean production estimates to 49.5mt for the 2023/24 season, lower than the 52mt estimated in January. The downward revision in the estimates was majorly due to continuous heat waves in the Pampas crop belt. Similarly, corn production estimates were also revised lower by 3.4% MoM to 57mt for the period.

Disclaimer: This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Original Post

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.