On Wednesday, the freight markets were clearly dominated by red. The prices of energy raw materials, precious metals (except palladium), as well as cereals and most so-called soft communities fell. The CRB index recorded a decrease by 1.34% up to 214.99 point The discount leaders included WTI oil, soya, wheat and orange juice prices. On the other hand, there were also references to palladium, cotton and wood and meat.
Pessimism in the Oil Market
It seems that oil prices will continue to move under supply pressure for at least a few months. This is due to the fundamental situation, which is the likely continuation of excess oil in the first half of this year.
In the oil market, investors are still far from optimistic. The price of American WTI oil dropped by over yesterday 3%, descending clearly below the level 45 USD for a barrel. Thus, the stock of this species of oil has closed to the lowest level since almost 6 years.
Yesterday, the attention of investors on the market of this raw material was drawn to the U.S. Department of Energy (DoE)'s weekly report on oil stocks in the US. According to the department, oil stocks in the United States have once again increased significantly over the past week – this time by less than 9,000,000 barrels. As a result, U.S. oil stocks were 407,000,000 barrels – this is their highest level from at least 1982, so since DoE started publishing such data.
The recent forecasts of investment banks regarding the price of this raw material have certainly also contributed to the pessimism in the oil market. According to Goldman Sachs, in first mid-year WTI oil price will move around 40 USD for a barrel, and it could even go below that level for a while. Barclays, on the other hand, heavily cut the average oil price forecast in 2015 The forecast for Brent oil was reduced from 72 USD to 44 USD per barrel, in turn forecast for WTI oil – with 66 USD to 42 USD for a barrel.
It seems that oil prices will continue to move under supply pressure for at least a few months. This is due to the fundamental situation, which is the likely continuation of excess oil in the first half of this year.
Wheat still under supply pressure
The supply side also dominates the cereals market in the United States. Yesterday the leader of the inheritance was wheat, which sank about 2.6%. The direct cause of this sale was weather forecasts in the United States, which forecast heavy rains in the wheat crops of the country. This in turn can lead to a large wheat production and an increase in the supply of this grain, which is already large.
Another reason for the price of wheat that has already lasted several weeks is to respond to earlier increases due to information about the decline in exports of this grain from Russia and Ukraine. In the end, such a decline will actually occur, but apparently investors considered that this would not be of much importance with such a well-stocked market.
Today, wheat quotations in the US have been at the lowest level since October. They reached the psychological barrier area in the area 500 USD for 100 The bush. In October, the descent below this barrier led to a clear recovery in the wheat market, as the price of American grain began to be competitive for wheat from other parts of the world. This time it may also be a factor that will stop the price decrease of this grain.