Oil watchers who have been anticipating a glut now have the numbers to back it up as global inventories climb. The world is spending billions for power infrastructure to meet soaring demand — and that’s going to need a lot of engineers. China hosts the world’s biggest solar convention this week where the mood might be gloomy. And silver is shining brighter.
Here are five notable charts to consider in global commodity markets as the week gets underway.
1. Oil $WTI Crude Oil - main 2507(CLmain)$
Oil inventories have risen sharply across the world in recent weeks, a sign of the pressure that higher output from OPEC+ could place on the global crude market as the year progresses. Crude oil stockpiles globally rose by about 170 million barrels in the past 100 days, according to Kayrros, which monitors inventories. Data from OilX, part of consultant Energy Aspects, shows they’ve been swelling since February. Inventories matter because they offer clues on whether producers are pumping more or less crude than consumers need.
Source: OilX
2. Energy $Energy Select Sector SPDR Fund(XLE)$
The US and Europe have seen a boom in the demand for electricity with a corresponding increase in spending on the infrastructure that generates and transmits all that power. But the number of workers who can design and build those power plants and transmission lines hasn’t kept pace, with the US unable to fill about a third of its 400,000 new engineer roles created each year. The severe shortage of skilled workers is slowing progress toward electrifying everything, with implications for company profits, grid reliability and the fight against climate change.
Source: Boston Consulting Group
3. Solar $Solaris Energy Infrastructure, Inc.(SEI)$
The solar industry in China has seen stunning growth, but an anticipated drop-off in demand for products is sure to set the mood this week at the world’s biggest solar fair in Shanghai. Margins have collapsed as fierce competition forces manufacturers to sell at a loss. Mounting protectionism is choking off exports. Those circumstances will become even more difficult to navigate once a policy-driven rush to install panels in China peters out in the second half of the year. For all of the industry’s travails, BNEF is still forecasting year-on-year growth in solar installations of 9%.
4. Silver $Silver - main 2507(SImain)$ $Global X Silver Miners ETF(SIL)$
First gold, now silver. Investors are flocking to the white metal, which last week surpassed the critical level of $35 an ounce. Bets are it still has space to rally if it catches even a sliver of the safe haven demand that has sent gold to multiple all-time-highs. Industrial demand also has been solid, with the market set for its fifth annual deficit. Silver is valued both for its uses as a financial asset and an industrial input, including for clean-energy technologies. The metal is a key ingredient in solar panels.
5. Weather
North America, Asia and Europe are expected to be beaten down with sustained high temperatures and other weather extremes this season, with the heat raising Atlantic Ocean temperatures and boosting the odds of an active hurricane season. Forecasters expect the Gulf Coast, particularly Texas, to be vulnerable to more storms, which threaten power grids and crops.
— With assistance from Brian K Sullivan
For SG users only, A tool to boost your purchasing power and trading ideas with Cash Boost Account!
Open a CBA today and enjoy access to a trading limit of up to SGD 20,000 with upcoming 0-commission, unlimited trading on SG, HK, and US stocks, as well as ETFs. Find out more here.
Other helpful links:
Comments