WTI oil moves higher 📈
WTI crude oil increased toward $80 after a decline in US crude inventory by 8 million barrels last week. An upcoming OPEC+ meeting sparked fears of further output restrictions, as OPEC+ is supposed to meet on Dec. 4th to decide on output strategy. Rumors that the cartel will reduce output further in response to market weakness are gaining momentum.
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Newcastle coal prices tumbled 25% in a single day, falling to their lowest level since April 2022. Investors have been unloading long holdings due to falling demand and rising supply. Coal is now at $266, approximately 40% below its September peak of $458.
The price of natural gas in Europe tumbled for the fifth day in a row, dropping below 54€ on Friday. Prices have dropped 20% in just one week and are now close to levels not seen since September 2021.
EU natural gas futures dropped over 12.5% to 56€, the lowest since September 2021. The price is now down approximately 84% from its peak in August 2022.
Copper futures rose by 2%, closing at the $4 mark in early January, the highest price since June. The price surge is supported by expectations of stronger demand and looming supply concerns.
US natural gas dropped 10% to $4 on the first trading day of 2023, a level not seen in almost a year. Prospects of lower demand and falling inflation drive the commodity down. EU natural gas and oil prices followed.
European natural gas fell 4% below 77€, which is the lowest level since February. The price dropped to levels before the Russian-Ukrainian war began, amid mild weather and strong supplies. Gas prices are almost 80% below record levels of nearly 350€ hit in August.
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The Reserve Bank of Australia increased interest rates by 25 bps from 3.1% to 3.35%. The interest rates were raised for the ninth time in a row, bringing borrowing costs to a level not seen more than a decade.
“I envision a scenario in which inflation is dropping significantly and the economy is continuing to be strong,” Treasury Secretary Janet Yellen has remarked. “Having the lowest unemployment rate in more than 50 years and creating 500,000 new jobs doesn’t seem like a recession to me,” she added.
After almost falling to 100, the dollar index (DXY) surged above 103. This is for the first time since early January on rising hopes that the Fed will continue to hike interest rates. It was affected by the better-than-expected US jobs report.