Crude oil buys extended to a sixth week as WTI and Brent rose 22,000 lots to a 12 week high of 649,000 lots. Diesel (NY Harbor ULSD) has long since jumped to a three-year high of 48,000 lots as natural gas length continued to shrink despite the 7.3% price hike.
Latest news from our daily quick market report: Crude oil started the week on solid footing as the global electricity crisis continues to raise expectations of higher gas-to-oil switching demand at a lower rate. moment when OPEC + maintains its modest rate of monthly increase in oil production. . Saudi Aramco estimates that the gas shortage has already increased demand for oil by an additional 0.5 million barrels / day.
Coal futures in China jumped 8% overnight after torrential rains and landslides halted some production at mines in Shanxi province, the country’s largest producing region , thereby adding further support to global fuel prices, including crude. Monthly oil market reports are available this week, starting with OPEC on Wednesday and followed by the IEA on Thursday. With WTI already trading at its highest level in seven years, Brent could now aim for the 2018 high of $ 86.74.
Hedge funds had another chance to trade precious metals on the long side with net long gold up 61% to 67.8,000 lots, and long silver 1,000 to 4.6,000 lots. In general, exposure to both metals remains low as both metals are currently struggling to recover in times of favorable price developments, to fall back on negative price news. Copper also remains an under-held metal after many months of side-trading as only small changes were seen in the two shorted metals platinum and palladium.
Speculators have resumed selling soybeans, with net long dropping 9.9,000 lots to 49.5,000, a fourteen-month low, and over the past year, net long has now slumped by 80 %. Meanwhile, soybean oil has caught the attention of buyers because of its connection to fuel. Small corn buys as the CBOT wheat position returned to a net long position, a development that has been seen four times in the past year and reflects how speculators are struggling to reach consensus for this key culture.
In soft drinks, cocoa jumped 226% to 31,000 lots after the price jumped 8%. Cotton’s 9% rally to a new multi-year high supported a 2% increase to 96.7k lots, the highest since May 2018. Net coffee purchases continued (+ 6% to 45.6k) despite negative price action during the reference week.
The long dollar against ten IMM currency futures and the Dollar Index jumped 43% or $ 7.7 billion to $ 25.6 billion and is now the largest since June 2019. The greenback has been bought off against all currency futures except JPY, and speculators now hold net short positions in all pairs except NZD. Sales focused on the euro (23.2k), with speculators selling for the first time since last spring. However, at 22,000 lots, the short circuit remains well above the 114,000 lot shorting seen during the early stages of the Covid-19 panic in February of last year.
Interestingly, the aggressive dollar buying occurred in a week the Bloomberg Dollar Index traded unchanged, with the weakness of the EUR being offset by the strength of all other crosses. major, in particular the GBP, the CAD and the AUD.