Lithium and uranium companies will compete for investor attention as mining enthusiasts flock to Toronto for one of the industry's largest global gatherings. US natural gas is on a losing streak. Crude oil spreads are rising. And renewable jet fuel is set to take off.
Meanwhile, agricultural traders will be watching the monthly World Agricultural Supply and Demand Estimates (WASDE) report for clues about U.S. planting seasons and the status of international crops.
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Here are five notable charts to consider in global commodity markets as the week begins.
metal
Lithium and uranium — two metals touted for their role in the energy transition — will take center stage at the Canadian Association of Prospectors and Developers' annual meeting this week. Lithium's shine, which hit a record high in November 2022, is fading as demand for the key electric vehicle battery material slows on concerns about oversupply. Radioactive uranium has emerged as the next hot metal, with prices soaring amid concerns about a lack of demand for fuel for nuclear power plants. Investors can hear both lawsuits at PDAC, which runs through Wednesday.
Agriculture
Grain traders may be wondering if a bottom is coming for prices, with corn and soybean futures trading near their lowest since 2020. Abundant supplies but lackluster demand, especially for soybeans, are weighing heavily on investor sentiment, with hedge funds being the most bearish. Traders will await the release of the USDA's monthly WASDE report on Friday for the latest assessment of domestic and international markets.
jet fuel
U.S. sustainable aviation fuel (SAF) production is expected to reach nearly 3 billion gallons per year by 2030, falling just short of President Joe Biden's “at least” that amount, according to BloombergNEF. . The tax credits from his landmark Inflation Control Act have flooded the market with investment and brought more projects online. The fuel, made from waste oil and agricultural raw materials, is considered one of the most powerful emissions reduction tools for airlines. Bloomberg Intelligence estimates that for airlines to meet zero-carbon goals, SAF capacity will need to increase by 30% annually over the next few decades.
oil spread
A sharp rise in oil spreads is typically seen as a sign of improving supply-demand conditions and largely reflects traders hedging against the possibility of a sharp rise in prices due to an escalation in Red Sea attacks.
The so-called prompt spread between Brent crude oil and West Texas Intermediate (the premium that the most recent crude oil futures contract puts on the next contract) last week was close to its widest in about four months, excluding expiration anomalies. It rose to There are also signs of strength in the physical oil market amid supply disruptions in the North Sea and Libya, strong demand for oil purchases from Nigeria's large new refineries and for US exports.
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Still, traders are wary of overinterpreting the recent rally, as much of the explanation for the rise in spreads stems from disruptions to oil flows through the Red Sea, rather than a complete loss of supply.
Natural gas
U.S. natural gas futures prices capped their first decline in four months in February as prices plummeted to their lowest since June 2020. North America's unusually warm winter led to the longest consecutive monthly decline in gas prices as demand for home heating fuels slumped as production soared. The deal is the first since the pandemic began. Analysts expect prices to remain depressed for some time as unseasonably warm weather is expected for much of next month. Meanwhile, U.S. inventories remain well above typical seasonal levels, with stocks in the latest week about 27% above the five-year average, putting further pressure on prices.
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