Oil and palm oil prices fell by 1.5-2% yesterday
Yesterday, the first day of trading in 2024, Brent crude oil prices began to rise amid heightened tensions in the Middle East, including Iran's deployment of a warship to the Red Sea after the US Navy destroyed three of the four Hussite boats there that attacked the Danish container ship Maersk Hangzhou .
However, at the end of trading, quotations fell by 1.5% to a 3-week low of $75.8/barrel (-6.6% for the week) amid pessimistic data on the US and Chinese economies.
S&P's index of business activity in the US industrial sector unexpectedly fell to a six-month low of 47.9 in December, although the market had expected it to rise to 48.4. At the same time, for China, this index was reduced by 0.2 to a 6-month low of 49, contrary to expectations for its increase to 49.6.
Experts believe that crude oil supplies will remain stable, although new routes around the Red Sea will increase costs. Denmark's Maersk and Germany's Hapag-Lloyd have announced that their container ships will avoid traffic through the Red Sea to the Suez Canal.
The oil market is also pressured by information about an increase in oil exports from the Russian Federation. According to Vortexa, over the past 4 weeks, the Russian Federation has increased oil supplies on average to a 7-month high of 2.6 million barrels/day.
In 2022, the Russian Federation received $590 billion from exports (mainly oil and gas), which is 37% or $160 billion more than the average over the previous 10 years, which indicates the ineffectiveness of the imposed sanctions. In 2023, the Russian Federation received $650 billion from exports, which is 51% or $220 billion more than the 10-year average. That is, during the two incomplete years of the war, the Russian Federation earned $1.24 trillion, which is 44% or $380 billion more than it received BEFORE the introduction of sanctions. At the same time, half of Russia's income is provided by trade with EU countries and Turkey, and the other half with Asian countries (mainly China and India).
March palm oil futures on Bursa Malaysia yesterday fell 1.7% to 3,660 ringgit/t or $790/t (-2.8% for the week) on the back of a slowdown in exports.
Global demand prices for sunflower oil with delivery to buyers for the week fell by another 3% to $820/t (-10% for the month).
Improved weather in South America is putting upward pressure on soybean and oil prices, leading to lower prices in nearby palm and sunflower oil markets.
On the Chicago Stock Exchange, March futures for soybeans fell by 2% yesterday (-3.5% for the week), and for soybean oil - rose to $1,063/t (-5.5% for the month).
