Primary Commodities Report for June 9th - 13th

By: Isha Khan, The Quinnipiac University Global Economics Research Team

Commodities Index

Source: Yahoo Finance and own calculations. Rates are in United States dollars per one (1) unit of goods. Brent Crude Oil is measured in barrels. Natural Gas is measured in MMBtu (Million British Thermal Units), Gold is per troy ounce, and for Nickel the price reflects price per share of (NIKL) ETF. They are all indexed to be at 100 at the start of the period.

In the week between June 6 and June 13, Brent Oil (black) was the biggest mover. While the price remained relatively stable until the 10th, there was a steep increase during the remainder of the week. Brent Oil ended the week at 11.67% above the baseline. Natural Gas (green) showed a consistent decline throughout the week, with a slight increase on the last day, ultimately ending the period 5.36% below the baseline. Gold (yellow) and Nickel (red) showed relatively few fluctuations, ending ~3% above and ~1.5% below their respective baselines.

 Commodities Historical Trends

Source: Yahoo Finance and own calculations. Rates are in United States dollars per one (1) unit of goods. Brent Crude Oil is measured in barrels. Natural Gas is measured in MMBtu (Million British Thermal Units), Gold is per troy ounce, and for Nickel the price reflects price per share of (NIKL) ETF. The center line is a rolling three-month average. The upper and lower boundaries are the average plus and average minus one standard deviation, respectively, for the same three-month period.

Brent Oil (black) shows the largest fluctuation out of all the commodities tracked. Rising from a price of $63.04 per barrel at the beginning of June to $74.23 per barrel, this jump exceeds the upper bound and is just below the three-month maximum price. Gold (yellow) continues its staggering increase, reaching a new three-month high of $3,431.20 per troy ounce. Natural Gas (green) prices stayed well within the upper and lower bounds this period, declining from an initial slight increase during the first week of June to $3.581 per MMBtu. Nickel (red) continues its sharp yet consistent increase since mid-April, reaching a new three-month high this week and ending the period just below that peak at $11.64 per share.

Additional Reading:

Oil prices jumped $5: Oil prices today: Where is crude heading after Israel attacks Iran - key points to note - The Economic Times

The main cause of the recent jump in Brent Oil prices stems from an impending conflict in the Middle East. The Israel-Iran conflict has raised concerns about potential disruptions in oil supplies. With the Middle East being a hub of key suppliers for global oil markets, any conflict in the area tends to increase prices due to the risk of reduced supply. Depending on developments—whether escalation or de-escalation—prices will respond accordingly. If sudden supply shortages occur, prices may rise; however, OPEC’s spare capacity should act as a stabilizing factor, though it is both limited and temporary.