Commodities Update 8

Commodities Update 8

11 August 2015

Important legal information

The oil price for Brent Crude Oil dropped about 5% last week. The price for the American WTI Crude oil even dropped about 6%. These are the lowest prices since March 2015. The “Wall Street Journal” reported that the price for Oil with a delivery in 2016 and 2017 is even lower. This indicates the possibility of permanently low oil prices. US shale oil drillers are profitable at a minimum price of USD 65 a barrel. But a barrel of WTI crude oil with delivery in December 2016 is more than USD 5 below that. According to “The Wall Street Journal” this is less than what would be necessary for the oil drillers to remain profitable.

After the drop in gold prices of 7% in July, the gold price stabilized at a lower level.

The price for Arabica coffee increased about 5%. Worries about the Brazilian harvest led to an increased demand by hedge funds and other speculative traders, who bet on dropping coffee prices. The Brazilian Coffee Association announced on Friday, that Brazil will only harvest about 40 million bags of coffee this season. Last year’s draught is likely to be the cause for this. The lack of rainfall during the main growing season in September and October last year had such a drastic impact, that the plants could not recover. The Swiss merchant house Volcafe had predicted an output of about 50 million bags before.



30/11/2022 08:03:55