In European trading on Tuesday, international oil prices rose strongly, with Brent crude oil futures standing at $69 per barrel for the first time since March 15 and WTI crude oil futures up by 2% at one point. Other commodities also moved higher, with spot palladium rising as high as US$3,017/oz, continuing to hit a new record high.
In addition, Tuesday Hong Kong stocks, although the overall ripples, but the non-ferrous sector is the storm again. Among them, Zijin Mining Hong Kong shares once surged nearly 15% during the day, closing up more than 12%; Minmetals resources rose nearly 10%; in addition, Luoyang Molybdenum, China Hongqiao, etc. also rose sharply.
Golden Ten’s article earlier Tuesday also pointed out that, bitcoin aside, the biggest hot spot in April was the sharp rise in commodity prices across the board, especially the price of agricultural products saw a stunning spike. And in a survey by Deutsche Bank, copper, a key industrial indicator, topped the charts with a 12.1% gain, reaching its highest level in 10 years. The Bloomberg Commodity Spot Index is now at its highest level since 2012.
International oil prices have remained higher in recent days despite the fact that OPEC+ has now eased tight supply restrictions and the Indian epidemic remains rampant. The EU plans to ease restrictions on travelers for vaccinations this summer, and states in the New York area will also ease restrictions. This offsets concerns about weaker oil consumption in parts of Asia, including major importer India.
Market analysis points to two factors underpinning the OPEC+ measures, namely the continued depletion of oil stocks as demand grows rapidly with the easing of epidemic restrictions in Europe and the U.S., and the absence of a surge in U.S. shale oil feed.
It is worth noting that despite the runaway epidemic in India, BSE has shown resilience as investors are happy to see signs of demand recovery in other regions. BSE has failed to successfully close above $70 since May 2019, so a close above $70 in the coming weeks would be a major breakout, rather than a brief intraday break above, as it was in March.
In any case, crude oil traders should not be blindly optimistic and need to keep an eye on three major shortcomings in the market ahead.
Credit Suisse, on the other hand, believes that palladium has held its 200-day SMA since it recovered it in July last year, and surged after breaking out of two oscillator ranges in mid-March and mid-April, easily breaking the previous record high of $2,884/oz. Credit Suisse maintains a bullish outlook for palladium, with key resistance at the $3,000/oz round number mark broken and the market looking up to $3,255-$3,260/oz. Normal conditions should be able to hold the $2520/oz support level.
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