Oil:
-
US inventories hover well above their seasonal pattern exerting additional downward pressure on prices
-
WTI prices move to the lowest since October 2017 on growing concerns over a faltering demand and still robust output
-
While Saudi Arabia has agreed to cut its production by 500 kbpd in December its November’s output has reportedly surged to a record near 11 mbpd in response to stronger than usual demand from clients preparing for a disruption in Iranian supplies
-
US shale boom continues unfolding, overall liquids productions has soared so far this year implying the US will continue cutting back on oil imports
-
The latest plunge in prices obviously has pushed the short-end of the curve substantially lower but it has had a limited impact on the long-end, it may imply that market participants expect OPEC to curb its output
US inventories remain far above their seasons pattern but they should begin shrinking to some extent in the weeks to come. Source: Bloomberg, XTB research
Start investing today or test a free demo
Open real account TRY DEMO Download mobile app Download mobile app
The shale boom in the US has driven liquids production much higher so far this year. Note that American net petroleum imports are forecast to fall in December 2019 to 320 kbpd, the lowest since 1949. Source: Bloomberg, XTB research
The WTI forward curve has flattened in recent days suggesting market participants could expect the OPEC will decide to slash production to lift prices. Source: Bloomberg
Brent prices have plunged notably in recent weeks reaching the support in form of $62 per barrel. This level could provide some relief to buyers ahead of the OPEC meeting in December 6-7. Source: xStation5
Natural Gas:
-
According to the EIA US natural gas inventories remain clearly below their 5-year average exerting upward pressure on prices
-
Hectic price movements has driven up futures volume on the NYMEX to the highest this year
-
Between 26 and 30 November temperature in key parts of the United States is forecast to be well below their normal values, another possible reasons to stay bullish on natural gas in the near-term
-
November month-to-date gas production in the US, in general, has been lower compared to the last month as higher output in the Gulf region and Northeast has been more than offset by declines in the regions such as Permian, Rockies and San Juan
-
Gazprom expects further growth in Chinese gas demand, and it plans to boost its global market share via “optimal combination” of pipeline gas and LNG supplies
Lower temperature in the east of the United States could keep elevated natural gas prices. Source: Bloomberg, XTB Research
Natural gas inventories in the US remain below the 5-year average implying demand still outpaces supply. Source: EIA, XTB Research
November month-to-date gas production in the US, in general, has been lower compared to the last month. Source: Bloomberg
Natural gas prices (NATGAS) test their important resistance nearby $4.80 per MMBtu. Source: xStation5
Corn:
-
The latest WASDE report resulted in a cut of estimated US corn production by 152 million bushels to 14626 million bushels due to expected lower yield per harvested acre
-
The WASDE release showed a reduced amount of estimated US corn exports (-25 million bushels) on the back of a rising share of Ukrainian grain
-
Ukraine’s agriculture minister sees the country’s 2018 corn output reaching a record 1.37 billion buhels
-
US corn exports in the currency marketing year has been well above the levels seen in previous years unlike exports of soybean and wheat
The production/consumption spread seems to give some hopes for bulls. Even though its relationship with corn prices have tended to be rather loose, a bit higher prices could be expected based on the level of estimated US ending stocks. Source: Bloomberg, XTB Research
US corn exports have been buoyant so far this year unlike soybean and wheat exports. Source: Bloomberg, XTB Research
The weekly chart implies that corn prices could be poised to head higher in the nearest future. A possible pullback could be used to enter a long with a relatively tight stop loss and decent room for profits ($405 per 100 bushels). Source: xStation5
