Crude oil prices plummeted due to the new spiking Covid-19 cases. Meanwhile, natural gas jumped to a 29 month highs.
Gold and silver dropped on the dollar’s increase, and copper sank after reduced industrial profits in China.
Hot weather supports corn and soybean prices this week.
Oil Almost Drops 2% Due to an Increase in Covid-19 Cases
Oil prices fell nearly 2% on Monday after reaching their highest since 2018 early in the session, as a rebound in COVID-19 cases in Asia and Europe slowed the rise.
Brent futures dropped by 1.97% or $1.50 to $74.68 a barrel. Meanwhile, West Texas Intermediate was down 1.54%, or $1.14, at $72.91.
Analysts believe that the forecast for a demand recovery during summer is a bit overestimated.
Several countries in the world are fighting a record number of the new Delta version of Covid-19 cases. Infections spiked in Asia and Australia and have already reached Europe.
This week, all eyes will be on the OPEC meeting and its allies on Thursday
OPEC forecasts point to an oil supply deficit in August and the rest of 2021. Analysts project that the organization may increase production.
Natural gas prices jumped to highs of more than 2 years
Last week and early on Monday, US natural gas prices surged to their 29-month highs. The price hike was a result of a tight supply. Besides, expectations for commodity demand are high because of scorching weather in many parts of the US.
On Monday, the US benchmark natural gas at the Henry Hub traded with an increase of over $3.50 or 1.52%, at $3.549 per MMBtu.
Because of the supply shortage, demand is forecast to stay high.
The Pacific Northwest and Texas experienced all-time record-breaking heat over the weekend.
Gold price dropped after the dollar’s increase
Gold has been trading very irregularly for the last seven sessions, trading between $1761.04/oz and $1797.21/oz.
The US dollar index increased on Tuesday, resulting in a decline of both Gold and Silver prices.
Gold futures for August were last down $8.70 at $1,772.00. Silver September futures on Comex was last down $0.184 at $26.07 an ounce.
In the EU session, gold traded with a drop of 0.67%.
Best prospects for silver for 2022
Silver has been trading pretty similar to gold. The white metal has just retaken the $26/oz level.
During the first half of 2021, the price of silver fluctuated between 24 and 29 dollars an ounce. At the moment, it is trading with a slight decline compared to its price at the beginning of the year.
However, analysts believe that the outlook is more optimistic than it might appear at first glance. According to the forecasts of the Silver Institute, the demand for the white metal will grow by 11% during 2021. They projected industrial demand to grow by 9%, to reach its maximum figure in the last four years, mainly thanks to the electrical and electronic sectors.
China’s reduced industrial profits impacted copper prices
The copper price dropped on Monday. The interest for the metal has weakened due to the slowdown in the growth of profits in industrial enterprises in China, rising inventories, and low premiums.
Three-month copper on the LME was last down 0.3% at $9,387 a tonne. The metal reached its biggest record in May, hitting $10,747.50.
China’s industrial companies hindered profit growth due to rising commodities’ prices which squeezed margins and disturbed manufacturing activity.
Investors are looking forward to advancing a $1.2 trillion US infrastructure deal that could benefit demand for metals.
Besides, the market is waiting for the release of China’s official factory activity data on Wednesday. Also, the US payroll data is due on Friday.
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