The massive crash in crude oil on Thanksgiving continued early this week, as dozens of countries and several U.S. states reported cases of the new highly contagious variant. Subsequently, governments around the globe instituted travel restrictions and other rules designed to reduce the spread of omicron.
As a result, crude, diesel, unleaded gasoline fell sharply until Thursday. On that day, OPEC countries and Russia hinted they might not increase output as quickly as expected, so prices stabilized toward the week’s end. Natural gas prices also fell sharply despite shortages in Europe and the slow replacement of supplies from Russia.
As of midday Friday, January crude was down about $1.50 per barrel on the week, while January unleaded gasoline brought $1.9680 per gallon before tax. Natural gas for January was at $4.20, up about a penny.
Federal Reserve Chairman Jerome Powell told Congress the U.S. central bank would likely tighten monetary policies, potentially raising interest rates sooner than expected. Gold and silver tumbled at midweek on that fear, which can make owning metals more expensive and, therefore, less attractive. Gold for February delivery was $1,781 per ounce on Friday, while March silver traded at $22.44 per ounce.
Grains swing with COVID but recover on demand
At the week’s start, the omicron outbreak scarred wheat, corn, and soybeans. However, active buying of soybeans by China and dryness in many crop-producing regions worldwide, such as in Brazil and Argentina, overtook the sentiment and added several cents per bushel to our row crops.
January soybeans traded at $12.66 per bushel at midday Friday, up 20 cents. March corn was at $5.85 per bushel and March wheat was at $8.01 per bushel.
Walt Breitinger is a commodity futures broker in Valparaiso. He can be reached at (800) 411-3888 or www.paragoninvestments.com. This is not a solicitation of any order to buy or sell any market.