It was generally a strong week for commodity prices despite the US dollar nudging higher. Oil prices rose by ~3% after the IEA revised its forecasts towards a tighter oil market and following the attacks by Ukraine on Russia’s oil refineries. Meanwhile, among the largest price rises this week was copper after a number of copper smelters in China announced they will cut production. China’s refined copper production growth will slow markedly this year, which will contribute to a widening deficit in the market and further prices increases by end-year.
Looking ahead, we will get a clearer picture on Monday of how China’s commodity demand held up over January and February, with the release of activity data. Later in the week, any indication at the FOMC meeting on Wednesday that officials are considering waiting longer before commencing rate cuts could weigh on commodity prices.
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