Commodity Roundup: Natgas futures down as EIA lowers price forecast for 2024; copper futures rise
Natural gas prices ticked lower on Wednesday, extending losses for the third consecutive trading session, as the U.S. Energy Information Administration lowered its expectations due to high inventory levels and lower demand on the back of a mild winter.
In its Short-Term Energy Outlook published Tuesday, the EIA sees natural gas spot prices at Henry Hub averaging $2.27 per million British thermal units in 2024, down 14.4% from its February forecast, and a 10% decrease from 2023.
The EIA expects Henry Hub spot prices to stay under $2 per million British thermal units in the second quarter, as U.S. natural gas inventories are expected to remain high relative to the five-year average.
The Agency however, raised its 2024 outlook for growth in domestic oil production by 260K bbl/day to 13.19M barrels, compared with its previous forecast for a gain of 170K bbl/day, and sees total U.S. petroleum consumption rising by 200K bbl/day to 20.4M bbl/day in 2024.
As a result, oil was trading higher on indication of strong demand in the United States, also supported by American Petroleum Institute data showing a drop in U.S. oil and fuel stocks last week. Wednesday’s official U.S. inventory report will be in focus next.
Turning to metals, gold prices ticked higher after snapping a nine-session long rally on Tuesday, as investors continue to gauge the Federal Reserve’s interest rate path. Industrial metals reached a YTD high with copper supported by supply issues and China smelters discussing cutting production to lift processing charges, Saxo Bank’s strategy team wrote in a note.
In the short run, gold prices will see some consolidation and probably stabilize around $2,100 level and will break above $2,200 by the end of the second quarter this year, Aakash Doshi, head of commodities, North America at Citi Research told Reuters. Spot gold (XAUUSD:CUR) held firm at $2,159.061.07 an ounce by 6 am ET.
Meanwhile, among base metals, the latest LME COTR report released yesterday shows that investors boosted net bullish positions for copper by 5,296 lots for a fourth consecutive week to 77,477 lots in the week ending on 8 March 2024, ING reported.
Copper futures (HG1:COM) rose to the highest levels in more than seven months after major Chinese copper smelters agreed to reduce production due to raw material shortages.
“Similarly, net bullish bets for aluminum rose by 3,564 lots after two consecutive weeks of decline to 10,839 lots at the end of last week. For zinc, money managers increased net bullish bets by 10,968 lots for a third straight week to 23,143 lots as of last Friday.”
Potentially relevant stocks include Freeport-McMoRan (FCX), Southern Copper (SCCO), Teck Resources (TECK), Ero Copper (ERO), BHP (BHP), Rio Tinto (RIO), Glencore (OTCPK:GLCNF) (OTCPK:GLNCY) and Anglo-American (OTCQX:AAUKF) (OTCQX:NGLOY).
Energy
Metals
- Palladium (XPDUSD:CUR) +2.32% to $1062.25/t.oz
- Platinum (XPTUSD:CUR) +1.37% to $933.35/t.oz
- Copper (HG1:COM) +1.31% to $3.9760/Lbs
Agriculture
- Corn (C_1:COM) -0.37% to $427.4/BU
- Wheat (W_1:COM) +0.27% to $537.42/Bu
- Cotton (CT1:COM) +0.58% to $95.73/Lbs
Commodity ETFs
Gold ETFs:
- SPDR Gold Shares ETF (GLD)
- VanEck Gold Miners ETF (GDX)
- VanEck Junior Gold Miners ETF (GDXJ)
- iShares Gold Trust ETF (IAU)
- Direxion Daily Gold Miners Index Bull 2X Shares ETF (NUGT)
- Sprott Physical Gold Trust (PHYS)
Other Metal ETFs:
- iShares Silver Trust ETF (SLV)
- Sprott Physical Silver Trust (PSLV)
- Global X Silver Miners ETF (SIL)
- U.S. Copper Index Fund, LP ETF (CPER)
- abrdn Physical Palladium Shares ETF (PALL)
Oil ETFs:
- U.S. Oil Fund, LP ETF (USO)
- Invesco DB Oil Fund ETF (DBO)
- U.S. 12 Month Oil Fund, LP ETF (USL)
- U.S. Brent Oil Fund, LP ETF (BNO)
- U.S. Natural Gas Fund, LP ETF (UNG)
- U.S. Gasoline Fund, LP ETF (UGA)
Agriculture ETFs:
