COT: Brent, copper, sugar buck selling trend
Head of Commodity Strategy
Summary: Leveraged funds continued to cut bullish bets across 25 major commodity futures in the week to September 18, but Brent crude shrugged off the trend on the back of supply disruption fears while copper and sugar also saw short-covering gains.
To download your copy of the Commitment of Traders: Commodities report for the week ending September 18, click here.
Leveraged funds cut bullish bets on 25 major commodity futures to 757,000 lots, a 2½ year low, in the week to September 18. The main driver last week was the grain sector which saw across-the-board selling ahead of what is expected to be a bumper US harvest.
The additional rally above $80/b in Brent crude oil this Monday followed comments from two of the world’s biggest oil traders about the short-term risk of higher prices. Executives from Trafigura and Mercuria at the annual Asia Pasific Petroleum Conference (APPEC) in Singapore both saw the risk of oil rising to $100/b by 2019. Falling supplies from Iran due to US sanctions may drive the market into a significant supply deficit during the coming quarters. You can follow news from the conference by following #PlattsAPPEC on Twitter.
Natural gas was sold before rallying on the news that China would introduce tariffs on US LNG at a lower-than-expected rate.
Latest Market Insights
Q4 Outlook 2022: Winter is coming
- Winter is coming to the financial markets as central banks are tightening their grip. How spring will look is still a question.
European energy crisis: it will get worse before it gets betterThe winter in Europe will be tough, but whether the result is political chaos or sustainable, innovative solutions is still undecided.
A difficult and volatile quarter awaitsAs the year draws to an end, commodities continue to be at centre stage of the world with growth pockets political uncertainty.
The bright side: crises drive innovationThe positive spin on crises is that they come with solutions. It is worrisome that deglobalisation may be a response to this crisis.
Green transformation in China: renewable energy and beyondGoing green, China needs to span numerous energy sources to ensure stability, as every source comes with a challenge.
Asia: Intermittent solutions, but a faster renewable adoption curveAsian energy supply is being squeezed. This and the adoption of renewables may change the investment sentiment in the region.
FX: A Fed thaw needed to deliver a sustained USD turn lowerThe US Dollar can keep momentum when the Federal Reserve continues to tighten, leaving the rest to play to their drum.
Autumn can become ugly for equities and bond holders. Comfort for Dollar longsTechnical analysis suggests that equities could face a tough Q4 as could fixed income. US Dollar positions could provide some upside.
The next stock market sector to watch, with stocks going nuclearAs the world scrambles to find affordable, sustainable energy, nuclear is getting attention from politicians and investors alike.
The crypto space is getting cold when the hype disappearsCryptocurrencies face a winter of their own as retail investors and governments are asking tough questions.