Commodity Markets Are Living on Borrowed Time
New Shareholder Elliott Pushes for Sale of Australia’s Top Gold Miner CityAM.com is the online presence of City A.M., London's first free daily business newspaper. Both platforms cover financial and business news as well as sport and… Commodity markets have spent the past three months performing an extraordinary balancing act.
Despite one of the most significant disruptions to global energy flows in decades, the global economy has continued to function remarkably smoothly.
After an initial spike, prices for several key commodities have stabilised or even eased.
The reason the system has held together is due to governments, producers and consumers drawing down the buffers that normally protect the global economy from disruption.
Those buffers are now approaching dangerous limits.
Inventories are being depleted at a remarkable pace.
Global oil stockpiles have fallen to levels that senior industry executives describe as unprecedented.
Aluminium markets are facing a similar squeeze.
Bloomberg recently calculated that combined stockpiles tracked by the London Metal Exchange, CME Group and the Shanghai Futures Exchange would cover less than five days of global supply.
The surprising resilience of commodity prices reflects the fact that the global economy has proved far more adaptable than many expected.
Strategic reserves have been deployed on a large scale.
The United States and Japan have both released oil from emergency stockpiles to cushion the loss of supply.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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