Russia Tightens Grip on Sakhalin-2 LNG Project - Commodities Roundup
-- Brent crude oil is up 2.2% to $111.14 a barrel
-- European benchmark gas is up 1% to EUR151.09 a megawatt
-- Gold futures are down 1% to $1,789.10 a troy ounce.
-- Wheat futures are up 0.7% to $8.90 a bushel
-- Three-month copper prices are down 3.1% to $7,981 a metric
Russia Tightens Grip on Sakhalin-2 LNG Project
Russian President Vladimir Putin on Thursday transferred all
rights and obligations of a consortium behind the Sakhalin-2 oil
and gas project to a new Russian entity, effectively giving the
Kremlin a veto over which foreign investors will be allowed to keep
Sakhalin-2, in Russia's far east, is one of the world's largest
oil and gas projects that supplies about 4% of the global liquefied
natural gas market. Shortly after Moscow's invasion of Ukraine,
Shell PLC said it would sell its 27.5% stake in the project as part
of plans to leave Russia altogether. Japan's Mitsubishi Corp. and
Mitsui & Co. own 10% and 12.5% of the project respectively,
while Russian energy giant Gazprom PJSC owns 50%.
Skyrocketing Inflation Hasn't Burnished Gold in 2022
Robust inflation and a stock-market rout didn't do much for gold
prices in the first half of the year. Investors don't expect
conditions to improve.
After gold climbed near records in March, prices slumped over
the next three months to their biggest quarterly percentage decline
in more than a year. The most actively traded gold futures contract
has fallen 7.5% to $1,807.30 a troy ounce, its worst quarter since
the 9.5% decline in the period ending in March 2021.
Morocco Wheat Production Forecast to Fall 70% in 2022-2023
Morocco's wheat production is forecast to fall by 70% in the
marketing year from June 2022 through May 2023 compared with the
prior year due to drought, the U.S. agriculture department said
Production is estimated at 2.25 million metric tons, down from
7.54 million tons in 2021-22, the department said in its Morocco
grain and feed update.
Palm Oil Futures End Lower, Reversing Brief Recovery
1104 GMT - Malaysian palm oil prices ended Asian trading lower,
as the commodity resumed a broad downturn since early June after
prices hit an all-time high earlier this year. Analysts highlighted
the easing supply shortage and rising fears about aggressive
interest-rate increases as the main drivers of the edible oil's
recent correction. The benchmark Bursa Malaysia Derivatives
contract for September delivery declined MYR202 to MYR4,708 a ton.
Silver to Test Prepandemic Lows, UBS Says
0856 GMT - Silver prices are likely to test prepandemic lows
according to analysts at Swiss-investment bank UBS, amid "Rising
U.S. rates, a stronger dollar and increasing US recession risks."
Prices in New York are currently sitting at $19.69 a troy ounce,
the lowest level since July 2020 and down over 13% from the start
of the year. "We think fundamental conditions are also falling into
place for silver prices to reach pre-pandemic levels. In short, we
expect prices to test $19 an ounce," the bank's analysts say.
Prices at the start of 2020 hovered between $17-18 an ounce. They
advised against adding silver exposure and "to hedge their long
silver positions over the next six months."
Copper Hits 17-month Low As Recession Fears Mount
0823 GMT - Copper prices in London are at their lowest level
since February 2021, as recession fears continue to hit demand for
the red metal. Three-month prices are down 3.1% to $7,980 a metric
ton. "Recession concerns have gained the upper hand and weighed on
metals prices," Commerzbank analysts Carsten Fritsch and Barbara
Lambrecht say in a note. "The LME base metals index has plunged by
25% in the past three months and finds itself at its lowest level
since April of last year. This was also the most pronounced
quarterly loss in nearly 14 years," they add.
Oil Set for Third Weekly Loss on Recession Worries
0736 GMT - Oil prices weaken and are on course for their third
consecutive weekly loss as recession fears have weighed on demand.
Brent crude oil edges down 0.2% to $108.78 a barrel and WTI
declines 0.6% to $105.17. Concerns are rising that central bank
tightening and soaring inflation will weigh on global growth and
push the U.S. and other major economies into a recession, reducing
demand for oil. "The inter-week collapse in oil price reflects
growing recessionary concerns," says SPI Asset Management in a
note. Oil prices have risen too quickly and mounting risk of a
recession is putting a cap on prices, it adds.
Iron Ore Prices May Come Under Pressure in 2H
0320 GMT - Iron ore prices may moderate in 2H as steel
inventories have been building up, Fitch Ratings says in a note.
"The longer it takes for construction and manufacturing sectors in
China to reopen, the more likely it is that steel margins will come
under pressure and some capacity is curtailed, putting pressure on
iron ore prices," the ratings firm says. The most-traded September
iron-ore contract on the Dalian Commodity Exchange falls 4.6% to
CNY765.5 a ton. (email@example.com)
Write to Yusuf Khan at firstname.lastname@example.org
(END) Dow Jones Newswires
July 01, 2022 08:08 ET (12:08 GMT)
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