A Rush to Stockpile Oil Will Keep Prices Higher for Longer -- Commodities Roundup

MARKET MOVEMENTS:

--Brent crude oil is down 3.3% at $91.15 a barrel.

--European benchmark gas is down 2.1% at 48.80 euros a megawatt-hour.

--Copper futures are up 0.6% at $13,672.50 a metric ton.

--Gold futures are down 1.1% at $4,316 a troy ounce.

TOP STORY:

A Rush to Stockpile Oil Will Keep Prices Higher for Longer

"Preppers" hoard essentials like water, food and fuel. Hit by the second global energy crisis in four years, governments are developing their own bunker mentality.

If they follow through on plans to stockpile more oil, energy prices could stay higher for longer no matter what happens next in the Middle East.

As it is, oil prices remain elevated and have grown volatile in recent days on renewed fighting that threatened fragile ceasefires.

OTHER STORIES:

BP Names Heads of Newly-Created Segments as Part of Simplification Push

BP has named Gordon Birrell as the head of its upstream division and Richard Harding as interim head of downstream as it pushes ahead with an organizational restructure intended to simplify how it operates and speed up decision-making.

The restructure is the latest signal management is accelerating its simplification efforts as it refocuses its attention on oil and gas. Both will assume their positions July 1 and BP said a recruitment process is under way to appoint a permanent head of the downstream business.

MARKET TALKS:

Flows Through Hormuz Are Rising, Energy Secretary Wright Says -- Market Talk

1052 ET - U.S. Energy Secretary Chris Wright says oil flows through the Strait of Hormuz are rising, but declines to offer details on how much is getting through. "I would say rising very meaningfully," he says at an Atlantic Council event. Oil futures are sharply lower after President Trump said a deal to end the conflict could come in two or three days. On Monday Trump said the U.S. blockade would remain until a deal is signed. Wright says a return to normal will take "many months" once the strait is reopened. The conflict with Iran has been "more of a struggle than we would like, but that solution will end with an Iran without nuclear weapons and with free flow of energy."([e-mail])

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U.S. Natural Gas Futures Inch Down in Early Trading -- Market Talk

0949 ET - U.S. natural gas futures are modestly lower as a cooler weather outlook for the second half of June crimps demand expectations. "Futures are trying to hold the seasonal bullish structure against weather models that have been cooling," Dennis Kissler of BOK Financial says in a note. LNG demand is expected to rise as maintenance ends, but "weather will need to move back to warmer-than-normal forecasts to lift prices significantly." Nymex natural gas is off 0.4% at $3.133/mmBtu.([e-mail])

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Oil Futures Retreat on Hopes for End to Middle East Conflict -- Market Talk

0941 ET - Oil futures give back yesterday's gains as Israel and Iran halt fire and President Trump says an agreement to end the Middle East conflict could be signed in two or three days. "The situation remains highly uncertain and we have seen many false dawns before," says Nikos Tzabouras of Tradu. "One diplomatic setback could reignite the risk premium and send prices sharply higher." Even if the Strait of Hormuz is reopened it will take months to restore flows to normal levels, he adds. WTI is down 2.6% at $88.89 a barrel and Brent is off 2.2% at $92.21. ([e-mail])

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Wheat Higher After USDA Reports Worse Condition -- Market Talk

0843 ET - The amount of winter wheat crops in good-or-excellent condition sank by one point in the latest Crop Progress report from the USDA, falling to 25% good-or-excellent. That's now 29 points below the rating at the same time last year, adding fuel to the fire for a crimp in U.S. wheat supply. It's the worst rating the U.S. winter wheat crop has ever had for this time of year, says AgMarket.net in a note. However, the firm says the spring wheat crop is looking considerably better--with 52% good-or-excellent, up 5 points from the prior week. CBOT wheat is up 0.9%, while corn climbs 0.6% and soybeans fall 0.3%. ([e-mail])

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Palm Oil Ends Lower Amid Weakness in Crude, Soybean Oil -- Market Talk

1010 GMT - Palm oil ended lower, weighed by soybean oil's weakness on the Chicago Board of Trade and weaker crude oil prices, says David Ng, a trader at Kuala Lumpur-based Iceberg X. Market sentiment is also weighed by Malaysia's recent export weakness, he adds. Ng expects crude palm oil futures to face resistance at 4,650 ringgit a ton and find support at 4,480 ringgit a ton. The Bursa Malaysia Derivatives contract for August delivery fell 48 ringgit to 4,527 ringgit a ton.([e-mail])

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Near-Term Backdrop for Gold Appears Less Supportive -- Market Talk

0819 GMT - T. Rowe Price shifts its stance on gold to more neutral from overweight, as the near-term backdrop appears less supportive than earlier in the rally. Central bank demand, one of the strongest sources, appears to have moderated. Portfolio manager Matt Bance says in a note that the precious metal may be sold or mobilized when countries face funding, currency, or balance-of-payments pressures. Central bank demand could thus be less supportive until the Middle East conflict eases. Furthermore, uncertainty surrounding the Mideast conflict, energy markets and the policy outlook may limit gold's near-term upside potential, he says. Gold is also competing for investor attention against areas with a stronger cyclical and structural growth narrative, such as artificial intelligence infrastructure, he adds. Spot gold edges up 0.1% at $4,331 an ounce, LSEG data shows.([e-mail])

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Gold Edges Lower as Traders Await Clarity on Middle East -- Market Talk

0754 GMT - Gold prices slip in early trading as investors await clarity on Middle East developments after Israel and Iran halted attacks on each other, easing immediate concerns over a wider escalation in the region. New York futures are down 0.3% to $4,351.80 a troy ounce. "Higher-for-longer rate expectations remain a headwind for non-yielding assets such as gold, particularly after strong U.S. economic data reinforced expectations of tighter monetary policy," says Soojin Kim from MUFG. "Gold remains around 18% below its pre-conflict level, reflecting the combined impact of rising bond yields, a stronger dollar, and shifting interest-rate expectations." ([e-mail])

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Iron Ore Falls Amid Weak Demand -- Market Talk

0300 GMT - Iron ore falls in early Asian trading. Underlying demand for iron ore remains weak, ANZ Research analysts say, adding that they see little chance of the structural decline in steel demand reversing without targeted policy support from China. Furthermore, weak consumption in China and high existing inventory levels continue to push prices down. ANZ expects oversupply pressures to intensify as production from Australia and Brazil expands and new mining projects come online. The most actively traded September iron ore contract on the Dalian Commodity Exchange is 0.3% lower at 759.50 yuan a ton. ([e-mail])

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Thermal Coal Futures Rise on Indonesia Supply Concerns -- Market Talk

0240 GMT - Delays to thermal-coal deliveries from Indonesia are heightening concerns about supply disruption, says Commonwealth Bank of Australia's John Oh. Indonesia accounts for nearly half of internationally traded thermal-coal supply and recently announced plans to centralize exports. Newcastle coal futures have jumped above $150 a metric ton, up 16% on month and their highest since the start of the Middle East conflict, Oh says. With delays in Indonesian supply, Oh is closely monitoring demand signals. "The key watch point remains the ongoing Middle East conflict and impact to LNG markets," he says. A resumption of LNG exports through the Strait of Hormuz could soften coal prices, says Oh. Although, Europe's gas stocking demand will likely be a key support for both LNG and coal prices in the coming months, he adds. ([e-mail]; @RhiannonHoyle)

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Copper Falls as AI Stock Rout Weighs -- Market Talk

0120 GMT - Copper falls in early Asian trading, with the three-month contract on the London Metal Exchange 0.2% lower at $13,589.50 a ton. The metal, a key commodity used in artificial-intelligence infrastructure, has weakened following last week's selloff in technology stocks, as investors grew increasingly concerned about the sector's profitability, ANZ Research analysts say in a note. However, losses were partially cushioned by Israel and Iran saying they would pull back from renewed fighting. Market sentiment has been further weighed by a strong U.S. jobs report that triggered expectations for the Federal Reserve to raise rates this year. Still, ANZ expects supply disruptions to persist given the continuing conflict in the Middle East and the effective closure of the Strait of Hormuz. ([e-mail])

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Gold's Near-Term Outlook Remains Bearish, Chart Shows -- Market Talk

0055 GMT - Gold's near-term outlook remains bearish, based on the daily chart, says Fawad Razaqzada, market analyst at FOREX.com, in an email. As indicated by gold's break below the 200-day simple moving average, the "technical picture has deteriorated noticeably following last week's sell-off," Razaqzada says. The next major area of support is a longer-term ascending trend line near $4,230 an ounce, the analyst says. "Below that, support levels become increasingly sparse until the March lows around $4,100, creating scope for a more pronounced decline if sellers maintain control," the analyst adds. Spot gold is 0.3% lower at $4,318.20 an ounce. ([e-mail])

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Oil Falls After Israel, Iran Halt Attacks That Threatened Peace Talks -- Market Talk

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06-09-26 1124ET