How is everyone's resource stock recently—a summary of key news on oil, gas, gold, and iron (06/15)
Seeing how many friends like resource stocks, but don't focus on commodity news at the bottom line, we've loaded up on commodity news to make it easier for everyone to invest in resource stocks.
The outlook for Chinese stimulus measures continues to support the market, supported by new supply-side concerns.
Basic metals rose as expectations of further stimulus boosted market sentiment. Senior Chinese officials are said to be holding urgent meetings with economists and business leaders on how to support the economy. Earlier, it was reported that Beijing is considering a series of broad stimulus measures focused on supporting the real estate market. However, new supply-side issues have also frightened bearish traders. Zinc prices rose more than 4% after the closure of an unprofitable mine in Ireland. Boliden announced that it will shut down Europe's largest zinc mine Tara business due to a weak price environment and high energy costs and poor operating performance. The difficult supply environment was also the reason why the CEO of Chilean state-owned company Codelco announced his resignation. Production is currently at its lowest level in more than 25 years, and the company's key development projects have also been delayed.
Iron ore futures continued their recent gains as investors bet further stimulus measures would boost demand for iron ore and steel. According to data from the China Iron and Steel Association, the steel production of major Chinese steel mills in early June increased by 6.5% compared to the end of May, which supported market sentiment. However, the increase was limited due to concerns that the government's room for maneuver might be limited by already-stretched local government balance sheets.
Gold rose in early trading as the Federal Reserve was expected to suspend recent monetary tightening policies. However, after Chairman Powell hinted at further rate hikes, it threw back those gains. US Treasury yields and the dollar soared in response, dampening investors' appetite. $Zhongjin Gold Corp.,Ltd (600489.SH)$
Crude oil prices fell due to signs of weak demand. U.S. crude oil inventories increased by 7.92 kbbl last week, according to EIA data. The situation was compounded by inventory at Cushing's main storage center reaching its highest level since 2021. Gasoline and distillate stocks were also higher, increasing 2,108 kbl and 2123 kbbl, respectively. The International Energy Agency said that as Chinese consumption rebounds from the pandemic, the oil market will be drastically tightened in the near future, which has boosted market sentiment. Earlier, Beijing issued a large number of crude oil import quotas, indicating strong demand. The IEA also estimates that global oil inventories will drop by 800kb/d next year, while the increase in US shale oil production faces the risk of falling oil prices and rising costs. The Biden administration has also tentatively begun to replenish strategic reserves. $Occidental Petroleum (OXY.US)$
European gas prices soared as markets tightened due to ongoing supply disruptions. Norwegian gas is likely to experience further disruptions as continued hot weather boosts demand. Temperatures in northwestern Europe are now expected to be above average by July. This helps raise the price of liquefied natural gas in North Asia.
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3047 is a team specializing in the research of commodities and smart beta. We like to exchange investment strategies.
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