Copper and European natural gas futures prices are both in the midst of multiweek losing streaks, while oil is looking to maintain the momentum after a two-week rally. In the US, investors will be focused on two annual general meetings from oil behemoths Exxon Mobil Corp. and Chevron Corp. Here are five notable charts to consider as the week in commodities gets underway.
Big Oil
Exxon is scheduled to hold its AGM on Wednesday. Two years ago, the oil giant suffered a rare defeat after activist investor Engine No. 1 — who held a tiny slice of Exxon shares — led a successful campaign to win board seats, part of a push to improve the company’s performance and accelerate its climate change goals. Since then, the stock has soared almost 80% — outperforming the 23-member S&P 500 Energy Index — showing the company may be under a lot less pressure from shareholders this time around. Chevron also hosts its annual meeting the same day.
Shipping
Panamax vessels used to carry grain and coal around the world are facing more delays amid a surge in demand. Ships are waiting longer at countries like Turkey and China, which have raised their imports of food and fuel this year. Congestion levels in March surged to 20% of the total Panamax fleet, the highest since August 2021, according to Arrow Shipbroking Group. While more ships are tied up waiting, bulk freight rates for these vessels are still struggling after sinking to a two-year low set in February, signaling an oversupply of ships.
Natural Gas
European natural gas prices have plunged more than 65% this year, and there’s little indication the slide will end anytime soon amid weak demand, larger-than-usual inventories and mild weather. Benchmark futures fell for the eighth straight week on Friday, the longest string of weekly losses since 2007. The slump raises questions about the possibility producers will curb production and how prices may be impacted heading into the Northern Hemisphere winter. Already, futures for December, January and February are trading below €50 per megawatt-hour. Meanwhile, natural gas prices in the US are also showing weakness, tumbling more than 50% in 2023.
Oil & OPEC+
Despite a recent rally, oil is about 10% lower for the year as traders grapple with China’s lackluster post-Covid economic recovery, aggressive interest-rate hikes from the Federal Reserve and concerns over the US debt ceiling. That comes even after the Organization of Petroleum Exporting Countries and its allies shocked markets in early April with an unexpected cut to production, which initially sent prices higher amid supply concerns. OPEC+ members are scheduled to meet June 3-4 in Vienna, with market watchers anticipating no change in output after Russia’s Deputy Prime Minister Alexander Novak said last week the cartel wasn’t likely to take further measures, an apparent contrast to remarks a few days earlier from Saudi Energy Minister Prince Abdulaziz bin Salman saying speculators should “watch out.” Oil futures traded lower on Monday in light volume due to holidays in the US, UK and some European countries.
Copper
The red metal will take center stage as the Peru copper conference gets underway in Lima, bringing together industry executives, traders and government officials to share ideas related to mining and exploration. While copper prices had a solid start to the year, futures on the London Metal Exchange declined for a sixth straight week on Friday amid fading momentum in top consumer China and fears over the global economy. Copper is hovering above $8,000 a metric ton after falling below the closely watched level last week — and breaching the lower limits of its trading envelope, a technical measure built around moving price averages. The development can often signal the downward momentum may be overdone, while the widening band can indicate further volatility lies ahead.
--With assistance from Ann Koh and Kevin Crowley.
(Updates with Monday trading for European natural gas in fourth paragraph and oil futures in fifth paragraph.)
