Oil:
- WTI price broke above a peak from February 2020 near $55 per barrel
- Brent continues to trade below a peak from February 2020 near $59 per barrel. However, price has broken above previous local highs
- Vaccine rollout uncertainty is being diminished by Novavax and Johnson&Johnson as the two companies may significantly increase vaccine supply in the near future
- United States will not turn a blind eye towards significant increase in Iranian exports. The latest data hints that Iran could have boosted exports to 700kbpd in December and as much as 900k bpd in January. United States plan to continue to block exports and seize Iranian tankers
- Iran is currently producing around 2mbpd of oil while recent exports have amounted to around 10% of output. Most of exported crude has been shipped to China
- Thanks to Biden's actions, United States will no longer support foreign oil projects
Oil prices did not experience a major correction since the end of October 2020 and have rallied over 60% since. Price trades near 78.6% retracement of the drop started at the beginning of the previous year and the downward trendline. Area can be seen as a strong resistance zone. On the other hand, recovery from 2008-2009 suggests that the upward impulse should last until the end of summer period and reach $63-65 per barrel. CFTC data hints at oil being relatively overbought but not extremely overbought. Source: xStation5Silver:
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Create account Try a demo Download mobile app Download mobile app- Silver price pulls back following a rally above $30 mark, the highest levels since 2013
- The move was not accompanied by a significant increase in silver ETF holdings
- Registered silver inventories on COMEX exchange did not drop significantly signalling that there was not a run for physical silver
- Amount of available silver for immediate delivery at COMEX exchange sits at around 150 million ounces. Moreover, there are around 250 million ounces that are eligible for delivery. This shows that there is a low risk of the physical silver market drying out
- Nevertheless, silver remains an interesting commodity from a long-term perspective. However, it would not be as easy to manipulate this market as it was the case with small, oversold Wall Street stocks
- On the other hand, JPMorgan lowered forecasts for silver mining sector. The bank is known for manipulating silver market via shorting futures contracts and simultaneously buying physical commodity
There is little volatility in precious metals ETF holdings, including silver holdings. Source: Bloomberg
Amount of silver available for immediate delivery at COMEX has changed just slightly during recent retail investors' rally. Source: Bloomberg
The latest peak hints at the possibility of double top surfacing on the chart. Neckline can be found at $22 area. 250-session moving average can be found slightly below. Seasonal patterns hint at low being reached in early-March. Source: xStation5
Copper:
- The price is trading around $ 7,700 per ton, at the same time copper is very close to the December lows
- Price broke below 50-day moving average, nearest support in the form of the lower limit of the upward trend channel lies around $ 7,500 per ton
- The seasonal peak should theoretically take place in mid-February and then declines should last until early April
- To a large extent, the recent declines are related to the stronger US dollar, EURUSD close to 1.20
- S&P anticipates a further increase in copper prices this year due to the low inventories levels
- Recently lower prices may also be associated with the start of the New Year celebrations in China, which reduces the demand. On the other hand, the authorities encourage citizens to celebrate "locally", which may cause factories to resume production earlier than in previous years.
- UBS indicates a deficit this year at the level of approx. 470 thousand. tone. It is worth remembering that the LME inventories stand at only 88 thousand. tone.
- The bank recommends building long positions below 7,600 with a target of 9,500 by mid-year
- The bank assumes a 2.9% increase in supply this year, but with a greater increase in demand
Copper price is approaching support in the form of the lower bound of the upward trend channel. Source: xStation5
Coffee:
- Coffee is trading below 130 cents a pound, the weakening of the Brazilian real does not support such high prices
- La Nina continues to be a threat to coffee crops in South America
- The huge and very rapid increase in coffee inventories does not support such high prices
- However, weather and a possible revival of demand after the opening of gastronomy sector around the world will be the key factors to look for
- Next rollover is about +2 cents up
About 1/3 of the total drop in inventories that could be observed in the last few years has already been neutralized. This is related to the acceptance of Brazilian coffee for delivery. Source: Bloomberg
The Brazilian Real does not currently justify the relatively high coffee prices. Source: xStation5
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