In this week’s Market Movers Americas, presented by Benjamin Morse:
• California watches the sun as an eclipse arrives
• Crude oil grapples with a bond selloff
• Aromatics prices fall with crude, refined products futures
• Oversupply of copper remains a concern
Western power entities are bracing for a drop in solar generation due to an eclipse on Oct. 14. During the eclipse, the California Independent System Operator expects to lose more than 9 GW of solar power, most of its midday supply.
Crude traders are continuing to grapple with a selloff in the global bond market as rising US Treasury yields have reinforced a higher-for-longer interest rate narrative that is weighing on global demand outlooks. Tight global supply should backstop crude prices, but a fresh catalyst, possibly the latest war in
Israel, will likely be needed if prices are to surpass their September highs in the near term.
In downstream petrochemical markets, octane boosters are also in the spotlight after front-month crude oil and gasoline futures dropped by up to 15% in just over a week. Toluene and mixed xylenes prices followed due to a sharp drop-off in demand from gasoline blenders. With import volumes spiking for gasoline-blending components, aromatics players will be monitoring prices to see if the fallout continues, or if a correction ensues.
Copper traders are watching COMEX futures, where prices have fallen nearly 30 cents/lb since Sept. 1 and are approaching key support levels. Demand is a concern, especially following an International Copper Study Group report that expects a 467,000 mt surplus in 2024 due to a 4.6% increase in refined production.
I’m Benjamin Morse. Thanks for kicking off your Monday with S&P Global Commodity Insights.