Commodities Rebound Amid Oil Gains And Easing China Concerns

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Commodities Rebound Amid Oil Gains And Easing China Concerns

 September 23rd, 2021  |  13:19 PM  |   29 views

CHINA

Commodities rebounded as easing concerns over cash-strapped real estate giant China Evergrande Group and a surprise draw in U.S. crude inventories helped fuel a buying spree.

 

The Bloomberg Commodity Index, which tracks 23 raw materials, rose 1.4% on Wednesday, snapping a four-day streak of declines. Oil and gasoline futures gained the most in a week, while copper surged with most other base metals and agricultural markets from corn to sugar saw widespread gains.

 

Fears of default by Evergrande rattled global financial markets this week and raised worries about the broader economic impact on China, the world’s largest buyer of raw materials. But news that the real estate developer reached an agreement on an interest payment while China’s central bank boosted liquidity provided some relief.

 

Meanwhile, a bigger-than-expected reduction in U.S. crude inventories added to jitters of tightening energy supplies as Europe struggles with a dire gas shortage and an unprecedented spike in prices. Crude futures could jump to as much as $90 a barrel in coming months if the approaching winter in the Northern Hemisphere proves colder than normal, Jeff Currie, global head of commodities research at Goldman Sachs Group Inc., said in a Bloomberg TV interview.

 

“All the risk has shifted to the upside,” Currie said Wednesday, citing oil-and-gas production disruptions in the U.S. Gulf of Mexico and below-expected supplies from OPEC nations. “Supply chains are so severely depleted that the system can not accommodate any type of disruption.”

 


 

Source:
courtesy of BLOOMBERG

by Gerson Freitas Jr

 

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