Commodity Calls: Week Ending 13 December 2024

The US considers further sanctions against Russian oil, Australia’s Liberal Party pushes for nuclear energy adoption, and gold fluctuates on mixed inflation data.

Join Global X each week for ‘Commodity Calls’ to explore all the recent signals and developments that occurred in the world of commodities.

Looking for more? Check out this week’s Market Moves and Thematic Spotlight.

Crude Oil

Bullish

  • Canada has threatened to cut off energy exports to the US.1 This comes as a response to President-elect Donald Trump’s plan to place a 25% tariff on all US imports, including from Canada.
  • The US is considering further sanctions against Russia’s oil industry.2 The Biden administration is likely seeking to pre-emptively weaken Russia’s economy in preparation for the possibility that Trump may force Ukraine into a quick and unfavourable deal with Russia when he enters office in January.

Bearish

  • OPEC has cut oil demand growth forecasts for 2024 and 2025 for the fifth month in a row.3 The bloc’s estimates for growth in oil consumption for 2024 has now fallen 27% since its first estimate in July. Separately, the IEA has also been predicting that global demand for all fossil fuels will stop growing altogether this decade.

Explore crude oil with BCOM.

Uranium

Bullish

  • The US has selected suppliers for low-enriched uranium contracts following RFPs in June.4 The US Department of Energy has selected six companies which will compete for the contracts including Centrus, GLE, Urenco and Orano. All contracts will last for 10 years and a maximum value of US$3.4 billion will be granted to the awardees.
  • The Australian Liberal Party has released a new economic analysis which says nuclear power may be cheaper, cleaner, and more consistent.5 The paper suggests that a balanced energy mix which integrates nuclear power could be 44% cheaper in the long run than relying on renewables alone.

Bearish

  • Ukraine’s three operating power plants have reduced their electricity generation.6 This comes as the country’s energy infrastructure has come under threat. The reduced power levels are a precautionary safety step to prevent catastrophic failure in the event of an attack by Russia.

Explore uranium with ATOM.

Gold

Bullish

  • The US Federal Reserve is expected to cut rates by 25 bps at its December meeting.7 Lower borrowing costs typically improve the precious metal’s pricing as it doesn’t pay interest.

Bearish

  • US producer inflation unexpectedly accelerated in November potentially paring rate cut expectations in 2025.8 The US PPI which tracks wholesale prices rose 0.4% month over month, the most since June. Fruit and vegetables were the largest contributors to the upside surprise, rising 33% and 22% respectively MoM.

Explore gold with GOLD.

 

Forecasts are not guaranteed and undue reliance should not be placed on them. This information is based on views held by Global X as at 17/12/2024. Investing involves risk, including the possible loss of principal. Diversification does not ensure a profit nor guarantee against a loss.

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This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information is not intended to be individual or personalised investment or tax advice and should not be used for trading purposes. Please consult a financial advisor or tax professional for more information regarding your investment and/or tax situation.