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Fear of supply shortage pushes agricultural and energy prices up sharply

Data from the Commodity Exchange of Vietnam (MXV) showed that the green color completely dominated the world price list of raw materials yesterday (July 18). The strong gain of many important commodities supported the MXV-Index to reverse and increase by 1.16% to 2,247 points. The transaction value of the whole Department reached nearly 3,400 billion VND.

Agricultural products and energy are two market groups receiving a very positive buying force; contributing significantly to the overall growth of the whole market. The buying force was driven mainly by concerns about tight global supply, thereby creating motivation for prices to rise.

Oil prices rise again

At the end of the trading session on July 18, commodities in the energy group simultaneously increased in price. Natural gas prices took the lead with a 4.66% increase to $2.63/MMBtu, breaking a streak of four consecutive declines, supported by high electricity consumption ahead of heatwaves in the US, especially in the US. state of Texas. The state's Electricity Council said demand hit a record in the first two days of the week.

In the crude oil market, oil prices rebounded after the previous two declines as supply risks continued to drive buying. WTI oil prices ended the session up 2.16% to 75.75 USD/barrel and Brent oil closed at 79.63 USD/barrel, equivalent to an increase of 1.44%.

After hitting record highs in September and April, US shale oil production will fall for the first time this year from August to 9, according to a US Energy Agency (EIA) report. 4 million barrels/day.

Combined with production cuts from the Organization of the Petroleum Exporting Countries and its OPEC+ allies, the drop in production in the United States also raised concerns about a supply deficit in the second half of the year, boosting buying across the world. market.

Meanwhile, Russia's four-week average crude oil exports, which fell to their lowest level since mid-January earlier this year, stood at 3.1 million barrels for the week ended July 16. This is now about 270,000 bpd lower than February, the reference month for Russia's 500,000 bpd cuts.

The price of Russian Urals oil rose above the price ceiling of $60 per barrel for the first time last week. However, according to data from Argus Media, prices have returned to slightly below the ceiling, reaching $58.6 per barrel on July 17.

Experts from Citigroup said that Brent oil price will hardly fall below 70 USD/barrel, but will remain below 90 USD/barrel this year unless there are very strong impacts.

Oil prices were also influenced by inter-market factors yesterday when some large banks in the US and with global influence reported earnings in the second quarter. In particular, the profits of Bank of America and Morgan Stanley both beat experts' estimates, reinforcing the more optimistic sentiment about the US economy in the context of high-interest rates.

Early this morning Vietnam time, a report from the American Petroleum Institute showed that US commercial crude oil inventories fell by 800,000 barrels for the week ended July 16, lower than expectations for a decrease of 2.4 million barrels per day. MXV said this information will probably cause the recovery of oil prices to slow down in today's opening session.

Agricultural prices soar

Corn price suddenly jumped 5.63% to 210 USD/ton in yesterday's session and led the group of agricultural products. This is also the strongest increase in corn in nearly 2 years. The market was driven mainly by the news surrounding the export situation in the Black Sea, amid concerns about the crop in the US that is not over yet.

A day after Russia announced that it would not renew an agreement to allow safe passage of grain export transport ships in the Black Sea, rising tensions in the region have restarted a fresh surge for the agricultural group. produce.

This is also the main reason behind the increase in wheat prices, especially after reports of infrastructure damage at the port of Odesa. At the close, Chicago wheat futures for September rose 2.60% to $246/ton, and Kansas wheat prices for the same term rose 1.47% to nearly $304/ton. According to MXV, the failure of the grain agreement to be extended is likely to be a very serious problem for the global supply of agricultural products if exports have not been resumed. This may open a new bullish cycle for world agricultural prices, which fluctuate strongly with a wide range similar to when the stress started.

Commodity Exchange of Vietnam (MXV)


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