London, 21 February 2022 (TDI): International Energy Week begins this week in London. It is much clear what the key debate points will be for those who join.
Russia-Ukraine tension is continuing to dominate the market. There has been increased activity on the Russian-Ukraine border in current days and so the market will be getting upset if there isn’t a de-escalation.
Energy Sector
One of the debates will be of course on the energy sector. While there is plenty of doubt about what Russia may do, there is even more doubt over how the West may react. The North-Sea physical market has been very solid currently, facilitated by good refinery limits.
In addition, doubt over Russia and the possibility for sanctions would possibly see some European refiners choosing to work in North-Sea crude oil rather than Russian oil.
Middle-East markets have also seen strength, which would be supported by refinery limits, along with spreading in the Dubai/Brent spread. The strong spread would mean that Atlantic Basin crude is too expensive for Asian refiners, so they will be pivoting gradually to the Middle East.
Agriculture Sector
The agriculture sector will also be discussed at the Energy Week. The price of soya beans continues to get higher on Friday with the Chicago Board of Trade (CBOT) soya beans concluding the week at approximately a nine-month high of 16.2$ U.S. on higher demand for U.S. soya beans.
Higher crude palm oil prices in Asia also remain to be helpful to the whole oil-rich seed complex as customers move from crude palm oil to premium soya bean or other edible oil.
Metals
The situation of the metals’ market will also be deliberated upon, during the Week. The Base Metals remained mixed on Friday. London Metal Exchange (LME) nickel continuous to trade higher and finished at U.S. 24.144 $/t (that was the highest finishing worth since 2011).
The latest Commodity Future Trading Commission (CFTC) statistics show that the opportunists increased their net long position in the Commodity Exchange Inc (COMEX) by purchasing copper 12,055 lots over the previous reporting week, and leaving them with a net long of 36,868 lots as previous Tuesday.
For costly metals, speculators increased their net long in COMEX gold by 40. 757 lots, to leave them with a net long of 125.646 lots (the highest since the week ending on ninth November) while increasing their net long in silver by 7.506 lots.
