How are your resource stocks recently — Summary of key oil, gas, gold, and iron news (August 25)
Seeing how many friends like resource stocks, but don't focus on commodity news at the bottom line, we've loaded up on commodity news to make it easier for everyone to invest in resource stocks.
The easing of supply problems has led to a decline in the energy sector, while concerns about the Chinese economy have intensified the sell-off. European gas prices plummeted as fears of a strike at Australian LNG facilities abated. The union representing Woodside Energy Group's northwest continental shelf liquefied natural gas business workers said they are considering a strong offer from the company. Details of the offer will be announced later this week. Despite this, all traces indicate that a strike action will be avoided. Following the news, European benchmark futures fell 30%. However, due to ongoing disputes over two other Australian LNG plants, some of these losses were covered later in the deal. If Chevron fails to provide an appropriate offer during negotiations, union members vote for a strike action against Chevron's Gorgon and downstream Wheatstone facilities. These operations still account for an annual supply of 24.5 tonnes, or 5% of global liquefaction capacity. LNG prices in North Asia fell, similar to European prices, after Woodside workers reached an agreement with the company on wages and other terms. Demand in the spot market remains sluggish as traders wait for price fluctuations to subside.
$YANKUANG ENERGY(01171.HK$
Crude oil rose slightly while trading was weak, as the market considered the impact of increased supply and a weak economic context. There are reports that the Biden administration is in negotiations with Venezuela to ease sanctions, which has suppressed market sentiment. Before sanctions were imposed on its oil industry, the country's production was as high as 2mb/d. The current output is around 750kb/d. There are also reports that the tense situation between the US and Iran has abated, opening the door to discussions on a possible nuclear agreement. Despite this week's pessimistic mood, the spot market remains tense. Kpler's data shows that OPEC restrictions have led to a sharp drop in global oil inventories over the past month.
As the market prepares for the earnings season, iron ore futures are falling, and the earnings season should highlight the serious situation in China's steel industry. According to data from the China Iron and Steel Association, steel inventories have risen to their highest level since May, which has not boosted market sentiment. This weakness has been caused by the struggling real estate sector, which shows no signs of improving. Recent financial support measures for China's real estate sector have not brought any short-term relief to developers. The 25% year-on-year decline in sales area in July indicates that consumers are also unwilling to buy homes. Furthermore, the rate of new construction and construction under construction fell by nearly 50% year over year. This situation does not seem likely to be reversed in the short term. Financial distress will force real estate developers to sell large amounts of unsold inventory before the number of new buildings picks up.
$SSIF DCE Iron Ore Futures Index ETF(03047.HK$
Copper prices ended five days of continuous gains, as investors await Fed Chairman Powell's speech, which may provide clues about his next steps to curb inflation.
$JIANGXI COPPER(00358.HK$
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3047 is a team specializing in the research of commodities and smart beta. We like to exchange investment strategies.
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