Diminishing forecasts for future oil consumption are including strain to crude costs. This yr’s Atlantic hurricane season has spun out fewer storms than 2023, however the toll from 5 that made landfall within the US will go down as a few of the most damaging in latest reminiscence. Orange juice futures are lingering at elevated ranges.
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Revealed Oct 20, 2024 • 2 minute learn
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(Bloomberg) — Diminishing forecasts for future oil consumption are adding pressure to crude prices. This year’s Atlantic hurricane season has spun out fewer storms than 2023, but the toll from five that made landfall in the US will go down as some of the most destructive in recent memory. Orange juice futures are lingering at elevated levels.
Here are five notable charts to consider in global commodity markets as the week gets underway.
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Oil
Forecasts for oil consumption subsequent yr from three essential forecasting teams have taken a bearish flip since July, largely pushed by weak point in China. These pared down projections have added a layer of gloom over the market that helped overshadow the continuing turmoil within the Center East. The Worldwide Vitality Company continued the development final week, chopping its forecast additional, with its estimate of a persistent glut subsequent yr contributing to crude’s sizable decline for the week.
Hurricanes
This yr’s Atlantic hurricane season has logged 15 named storms to date, due to the emergence of Tropical Storm Nadine and Hurricane Oscar on the weekend. That’s approaching a median yr, although the numbers might be deceiving: With 5 hurricane strikes on mainland US — together with Helene and Milton that hit two weeks aside and devastated swaths of the South — could go away 2024 as one of many costliest storm seasons. The true scope of damages may take months to totally consider, however for context Katrina in 2005 induced $200 billion in inflation-adjusted damages and Harvey in 2017 racked up $160 billion in prices.
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Orange Juice
Orange juice costs are about 50% this yr as drought and illness undermine output from Brazil, the world’s greatest provider of the juice, whereas Florida’s citrus groves proceed to dwindle. Futures reached contemporary data final month, and Hurricane Milton has underpinned greater costs after the storm felled fruits and timber within the high juice-producing US state. The US Division of Agriculture had already anticipated Florida’s manufacturing this season to be the bottom since 1933 — however including Milton’s influence may deal a good larger blow to the harvest.
Iron Ore
The world’s two greatest suppliers of iron ore, Rio Tinto Group and Vale SA, boosted output of the steelmaking ingredient within the third quarter, at the same time as demand from China faces headwinds as a result of nation’s unresolved property disaster. Rio’s quarterly output has climbed from earlier this yr, whereas Brazil’s Vale churned out its highest quantity since late 2018, forward of a dam-collapse catastrophe that triggered yearslong disruptions. The world’s high iron ore miners proceed to beef up provides, with their large-scale operations safeguarded by per-ton prices that stay far beneath present spot ranges.
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Electrical energy
The world is heading into an period of cheaper power costs as a shift towards electrical energy use leaves behind surpluses of oil and gasoline, the Worldwide Vitality Company predicted. Electrical energy use has grown at twice the tempo of complete power demand over the previous decade, and is ready to speed up with world demand for all fossil fuels wanes, the IEA forecast in its annual long-term report. The company expects world electrical energy era to almost double by 2050, with China main development within the Asia Pacific.
—With help from Brian Ok. Sullivan, Ilena Peng, Mariana Durao, Doug Alexander and Kevin Orland.
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