Commodity Market watch : Oil Is Well
Oil prices shine through the commodity markets during the fortnight
During the fortnight, WTI crude oil price and Brent crude oil price caught the limelight. This boost in oil prices can be traced to the recent announcement by the Organization of the Petroleum Exporting Countries (OPEC) and its allies that have agreed not to increase supply in April 2021 as they would wait for a more substantial recovery in demand amid the corona virus pandemic. Another reason for a spike in the oil prices was identified as the firing of drones and missiles by Yemen’s Houthi forces at the heart of the Saudi oil industry, including a Saudi Aramco facility at Ras Tanura, which is vital to petroleum export. Following oil prices was the rise in aluminum prices which can be traced to the rise in energy prices recently.
"During the fortnight, WTI crude oil price and Brent crude oil price caught the limelight while the largest dip was taken by lead prices."
The largest dip was taken by lead prices during the fortnight. Most of the participants off-loaded their positions due to the sliced demand from consuming industries in the physical market which was the key reason for pressure exerted on lead prices. The dip in lead prices was followed by a decline in the silver and gold prices. The primary reason for the decline can be identified as weaker-than-expected rise in inflation which in turn exerted pressure on gold and silver prices. The copper prices also recorded correction in the last 15 days as a result of indication of weakness shown by global equities as the US’ treasury yields spiked to around 13 months’ high, which led to surging up of the US dollar index.
Observing the data recorded during the fortnight, on MCX, cotton futures rose by 2.54 per cent whereas aluminum futures rose by 2.11 per cent. WTI crude oil prices jumped up by 5.54 per cent followed by Brent crude oil prices which increased by 4.62 per cent. The weakest performing future on MCX during the fortnight was MCX Lead which dipped by 8.05 per cent. MCX Lead was followed by MCX Gold which declined by 5.48 per cent whereas Silver, Zinc and Copper futures on MCX decreased by 4.98 per cent, 3.16 per cent and 3 per cent respectively.