Commodity Week Roundup

Energy

The energy sector is probably one of the most exciting sectors at the moment, with rising prices for crude oil, natural gas, and the unloved thermal coal.
Crude oil has closed the 7th week in a row with a plus and one must add here that further price increases are more than likely.

WTI crude oil closed the week with a plus of 4.9% to $79.59 per barrel.
Brent crude oil closed with a plus of 4.2% to $82.58 per barrel.

Hopes of an easing in crude oil supply were crushed by OPEC+ for the time being since OPEC+ does not want to further increase the crude oil output until the end of the year. The OPEC+ sits on approximately 95% of the crude oil spare capacities.
In the U.S., Europe, and Asia, gasoline prices have risen significantly in recent months. Especially in the U.S. and Europe, politicians like to point the finger at others, but the own policy of the last years has brought forth these grievances and are now more than visible.

Meanwhile, the U.S. government does not yet plan to release its strategic crude oil reserves.

Natural gas prices have risen 120% YTD in the U.S. and currently stands at 5.57 MMBtu. Natural gas prices in Europe, on the other hand, have seen a very steep increase over last year. Prices are up 477% to $22.84 MMBtu. Natural gas prices in Asia have increased a full 40% on Wednesday to a price of $56MMBtu.

Thermal coal, arguably the most unpopular fossil fuel among policymakers, is up a whopping 248% YTD. Right now the price is $230 per ton. There is much to be said about thermal coal, but it must be acknowledged that it is a very reliable source of energy and after the failure of politicians in recent years to develop cleaner sources of energy to the point of providing an equivalent substitute, the current green rate seems to become more than too fast. Replacing reliable energy sources with unreliable energy sources may be popular in politics but with the ordinary citizen, this trend is not so well received. Especially since the majority of the population wants to have it warm in the winter and the lights go on when you press the light switch.

The great thinkers of the nations have slowly understood this and are turning their attention to the child that has been unpopular for many years: uranium.

Nuclear power is the most reliable and cleanest way to produce electricity at the moment. As more and more thinkers reach for the poster child of “zero emissions,” which at the moment means taking money out of people’s pockets and making them feel good about it, the focus for clean, reliable energy is increasingly turning to uranium. Uranium has been and continues to be one of the most exciting markets as it has been disliked by many and disregarded for a long time. Investors moving in the uranium field have already made substantial profits given the fact that nothing has really happened in the market so far, except for the Sprott Physical Uranium Trust buying remaining uranium from the market and bringing prices up to $50 lately. Now the tide seems to be slowly turning as Japan wants to restart its nuclear fleet. This would certainly give the market a boost and uranium prices would rise again. It’s about time since most uranium producers need a price of $70 per pound to be profitable. The uranium market remains exciting and with a current price of $43.05 per pound, it is far from over.

Precious metals

The gold price has briefly flared up at the end of the week but was quickly regulated down again so as not to panic. The price jump to $1780 came after the more than disappointing U.S. labor market figures with a job creation of 194k. But just a short time later, the gold price found itself back at $1750.

The gold price closed the week with -0.22% at $1,756.64 per ounce.
The silver price closed 0.58% up at $22.66 per ounce.
Platinum prices closed up 5.5% at $1,029.50 per ounce.
Palladium prices closed up 8.2% to $2,080.50 per ounce.

Inflation continues to rise, debt and deficits know no end and real interest rates are in the basement. All good prerequisites for an imminent gold upswing. Attractive alternatives are to be found at the moment in the precious metal mining sector. The shares of the producers have been ignored in recent months and have therefore become cheap. Investors who want to participate in the gold market with leverage can definitely dare to take a look and study the shares of the producers.

And last but not least, there is the debt ceiling debate. We have heard the old chestnut 79 times now, which is why Washington should probably rethink their script because no one gets scared anymore.

Base Metals

Aluminum prices rise 3.37% to $2,957.85 per ton.
Lead prices rise 1.19% to $2,254.50 per ton.
Iron ore prices rise 6.1% to $118.10 per ton.
Copper prices rise 1.69% to $9,387.60 per ton.
Nickel prices rise 0.64% to $18,865.00 per ton.
Zinc prices rise 0.87% to 3,135.00 per ton.
Tin prices increase 1.76% to 36,900.00 per ton.

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