(Bloomberg) — Oil traders will attempt to price in what the Iranian strike on Israel over the weekend means for the global market, while the metals world monitors the impact of the London Metal Exchange’s banning of new Russian supplies. Meanwhile, the annual BNEF Summit will convene in New York, bringing together project developers, government officials and bankers to discuss global trends in the energy transition.
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Here are five notable charts to consider in global commodity markets as the week gets underway.
Aluminum
The LME banned delivery of new Russian metal following sanctions imposed by the US and UK, but left the door open for a wave of old stocks to hit the market and raise the risk of pricing dislocations. No Russian metal produced from April 13 onwards will be eligible for delivery to the LME, which plays a central role in the global metals world as the home of benchmark prices for everything from copper to zinc. Aluminum — which is up sharply since the end of February — surged by more than 6% at the open.
Clean Tech
The world’s dependence on China has increased for technologies needed to support a global transition away from fossil fuels, according to BloombergNEF. Breakneck spending has pushed China’s share of global production capacity above 80% in 11 clean-technology value chain segments. China’s capacity is set to far surpass global demand across solar, batteries and electric vehicles for years to come. Supply chains for clean energy will be among the topics discussed at BNEF’s summit on Tuesday and Wednesday.
Oil
Global benchmark Brent crude has shrugged off Iran’s attack on Israel over the weekend, but the direct strike opens up a dangerous new phase in the Middle East conflict. The escalation will force the market to reevaluate the geopolitical risk premium it needs to apply to a market where tight supply-demand fundamentals have already driven prices above $90 a barrel. The region produces around a third of the world’s crude.
Eggs
Bird flu is flaring up again: The top US eggs producer reported this month the worst American outbreak since December while the highly pathogenic avian influenza virus made the jump to dairy cattle. Egg prices so far have held relatively in check, but there are expectations they could rise again with more egg-laying chickens potentially catching the virus amid peak migration season for wild birds. The worst-ever outbreak has never fully abated since it was first detected in the US in February 2022.
Energy
A strong oil-fueled rally in energy stocks is gathering momentum, helping them outperform technology indexes this year. The closely watched Energy Select Sector exchange-traded fund, or XLE, is up nearly 15% since the start of the year, while the Nasdaq 100 Index has gained just 7%. Rising oil has helped, after West Texas Intermediate crude broke above $80 a barrel in mid-March. Energy has led the S&P 500’s 11 market sectors since the start of March, rising more than 11% compared with the next closest group, communication services, at 5.8%, and the 0.3% decline in the broader index.
–With assistance from Brian Eckhouse, Geoffrey Morgan and Doug Alexander.
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