USOI - The May Commodities Rally Comes To An Abrupt End

2024-06-08 10:00:00 ET

Summary

• Oil is down, and so is copper after hitting record highs in May.
• Natural gas prices, however, continue to be supported by supply concerns.
• LME copper stocks have grown more than 15% since mid-May, while the cash 3-month spread is in deep contango and not far away from the recent record lows.

By Warren Patterson

Oil market in deficit for the remainder of 2024

Oil prices were largely rangebound through much of May but have come under pressure in recent days. There are growing signs of weakness in the physical oil market, which prevented oil prices from moving significantly higher. Weak refinery margins are starting to see refiners reducing run rates, while the weakness in prompt crude oil timespreads suggests little concern over the availability in the near term....

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