2023-11-01 15:54

Copyrighted Image by: REUTERS The escalating conflict in the Middle East could have significant impacts on global commodity prices, according to the World Bank's October 2023 Commodity Markets Outlook report. The Washington-based institution warns of potential hikes in oil and commodity prices if the Israel-Hamas conflict expands across the region. The report suggests that supply disruptions could cause a ripple effect on the global economy and exacerbate food insecurity. In a small disruption scenario, similar to the Libyan civil war in 2011, the global oil supply would decrease by 500,000 to 2 million barrels per day, leading to an initial oil price increase of 3-13%. In a more severe scenario, akin to the Iraq war in 2003 or the Iran-Iraq war, the oil supply could be curtailed by 3-5 million barrels a day, driving up prices by 21-35%. A large disruption scenario comparable to the Arab oil embargo during the Yom Kippur War in 1973 or Iraq's invasion of Kuwait would reduce the global oil supply by 6-8 million barrels per day, causing prices to soar by 56-75%. Oil prices could escalate from a $90 a barrel baseline forecast to $102 or surge to $157 per barrel in small and large disruption scenarios respectively. These fluctuations would also impact natural gas prices. The ongoing conflict has already led to a tragic loss of life, with approximately 9,400 deaths including Israeli civilians, soldiers, Americans and over 8,000 Palestinian casualties in Gaza and 110 in the West Bank. At least 10 Americans are among the 239 individuals held captive by Hamas. The situation has escalated due to Israel's expanded ground operations in Gaza and is being closely monitored by the international community. Despite these potential disruptions, today's global economy is better equipped to handle major crude oil price shocks than during the 1970s due to decreased dependence on energy commodities, diversifying supply sources, strategic reserves, and institutions like the oil futures market and International Energy Association, according to the report. Ayhan Kose, World Bank's Deputy Chief Economist, warns that sustained higher oil prices would inevitably lead to higher food prices. Indermit Gill, Chief Economist at the World Bank, advises policymakers to be vigilant as escalating conflicts in Ukraine and the Middle East could lead to a dual energy shock. According to the World Bank's preliminary assessment, if the conflict does not expand further, its impact on commodity markets should be limited. It predicts crude oil prices to average $90 a barrel in the current quarter, declining to $81 next year due to slowing global economic growth. The report also forecasts a 4.1% decrease in overall commodity prices next year, with agricultural commodities and base metals prices expected to drop in 2024 and stabilize by 2025. https://www.investing.com/news/stock-market-news/escalating-middle-east-conflict-could-impact-global-commodity-prices-93CH-3217482

2023-11-01 15:31

Copyrighted Image by: Reuters. Investing.com - US crude stockpiles grew by less than half of forecast levels while gasoline and distillate balances saw modest changes as well in one of the least consequential weekly inventory reports for the year, released on Wednesday by the government. The US crude inventory balance rose by 0.773 million barrels during the week ended Oct 20, the Energy Information Administration, or EIA, said in its Weekly Petroleum Status Report. Analysts on Wall Street energy desks had expected the EIA to report an inventory build of 1.802M barrels for the just-ended week, a consensus of their forecasts showed. In the prior week to Oct 13, the agency reported a build of 1.371M. Exports of crude, usually one of the bright spots in the weekly inventory report, was uneventful too, with 4.897M barrels per day cited for last week versus the prior week’s daily export rate of 4.833M. The only eventful item on the EIA report was probably the change in crude stockpiles at the Cushing, Oklahoma storage hub, which serves as delivery point for futures contracts of the benchmark West Texas Intermediate, or WTI, crude traded on the New York Mercantile Exchange. Cushing storage levels have dropped drastically this year, prompting concerns they might reach such critical lows to complicate operations at the storage hub. Despite such concerns, Cushing storage levels grew by 0.272M barrels last week, the EIA report showed, after a prior gain of 0.213M. On the gasoline inventory front, there was a build of 0.065M barrels on top of the previous gain of 0.156M and analysts’ consensus for a decline of 0.133M. With distillate stockpiles, there was a drop of 0.792M barrels on top of the prior week’s deficit of 1.686M and analysts’ consensus for a drop of 1.0M. Distillates are refined into heating oil, diesel for trucks, buses, trains and ships and fuel for jets. https://www.investing.com/news/commodities-news/us-crude-fuel-stocks-see-one-of-the-least-consequential-weekly-changes-for-2023-3217405

2023-11-01 15:30

Coinbase (NASDAQ:COIN), the U.S.-based publicly traded crypto exchange, has recently expanded its offerings to include Bitcoin and Ethereum futures trading for retail investors. These new contracts are available via Coinbase Advanced and are designed to cater to smaller traders with lower upfront capital requirements, in contrast to offerings from CME. The contracts are structured at 1/100th of a Bitcoin and 1/10th of an Ethereum, thereby democratizing access to the crypto futures market and extending its reach to a wider customer base. This move is part of Coinbase's strategy to compete with Binance, the global leader in cryptocurrency exchanges. Futures contracts allow traders to speculate on asset prices and trade more assets than they possess by using collateral. For instance, $100 can be used to trade $200 worth of crypto. The global trading volume of crypto derivatives markets notably surpasses that of spot markets. For example, Binance's 24-hour trading volume for crypto derivatives stands at about $37 million, significantly higher than its $9 million in spot markets. Recently, following the acquisition of a Bermuda regulatory license, Coinbase launched an offshore exchange specializing in futures. This development underscores the company's ambition to compete with market leaders like Binance, OKX, and BitMart in the trading of risky crypto financial instruments. The introduction of Bitcoin and Ethereum futures contracts on Coinbase Advanced was made possible after receiving regulatory clearance from the National Futures Association. Coinbase is now operating as a futures commission merchant. Traders possessing a spot trading account can now engage in various trading activities such as risk hedging and market speculation, further extending the accessibility of the crypto futures market to a larger pool of retail customers. https://www.investing.com/news/cryptocurrency-news/coinbase-targets-retail-investors-with-bitcoin-and-ethereum-futures-93CH-3217439

2023-11-01 14:51

Copyrighted Image by: Reuters. The global coffee market is expected to experience significant shifts in the coming year, according to the World Bank's Commodity Markets Outlook. The report predicts a decline in Arabica and Robusta coffee prices in 2024 due to increased supply from key producers Brazil, Vietnam, and Colombia. Arabica coffee prices saw a 14% drop in Q3 of 2023 and are currently around 30% lower than last year. This trend is anticipated to continue into 2024 as Brazil and Colombia are ramping up their production by approximately 14%. These two countries account for about 60% of the global Arabica output. Despite the overall downward trend, Robusta coffee prices rose slightly by 2% during the September quarter and are over 17% higher than last year. The robusta market is projected to remain tight due to reduced production in Indonesia and Uganda. However, Vietnam's increased output, which contributes to more than two-thirds of global robusta production, could potentially ease this tightness. The report also highlights potential factors that could impact these price trends. An intensification of El Niño conditions and a potential global economic downturn could have significant effects on coffee prices. In India, Arabica prices have followed the global trend with a decline of over a third. The farmgate prices of Arabica parchment stand at ₹10,900-11,200 per 50 kg bag, while Arabica cherry prices are at ₹6,450-6,650 levels. Conversely, Robusta prices remain firm with parchment prices around ₹10,000-10,400 levels and cherry prices hovering around ₹5,900-6,200 levels. As the global coffee market adjusts to these changes in supply and demand dynamics, producers and consumers alike will need to keep a close eye on these evolving trends throughout 2024. https://www.investing.com/news/commodities-news/global-coffee-prices-set-for-shift-in-2024-due-to-supply-changes-93CH-3217385

2023-11-01 14:50

Copyrighted Image by: Reuters. Market makers including Hudson (NYSE:HUD) River Trading, Jane Street, Virtu Financial (NASDAQ:VIRT), and Jump Trading are in discussions with BlackRock (NYSE:BLK) over the prospect of providing liquidity for its anticipated Bitcoin exchange-traded fund (ETF), contingent on regulatory approval. This engagement coincides with a wave of similar applications from major asset managers and Wall Street firms, signaling renewed institutional interest in the Bitcoin market. The U.S. Securities and Exchange Commission's (SEC) decision not to contest a court criticism of its initial denial of Grayscale's bid to convert their Bitcoin Trust (GBTC) into a spot ETF suggests a potential shift towards acceptance of Bitcoin ETFs. This development has led market participants to anticipate an increase in institutional involvement and a potential reduction in Bitcoin's price volatility. However, the crypto landscape has been marked by liquidity challenges. Prompted by events such as FTX's collapse in 2022, some firms have scaled back their crypto activities. Market makers are integral to ETFs as they create and redeem shares to keep the ETF's price aligned with its intrinsic value. The Grayscale Bitcoin Trust (GBTC) illustrates this, with its price deviating significantly from its underlying Bitcoin holdings due to a missing redemption mechanism. Despite these challenges, institutional adoption remains a key catalyst for Bitcoin. Matrixport predicts that Bitcoin will reach a minimum of $42,000 following US spot ETF approvals. This forecast is further bolstered by JP Morgan's prediction of imminent approvals for spot Bitcoin ETFs in the US. https://www.investing.com/news/cryptocurrency-news/bitcoin-etf-prospects-rekindle-institutional-interest-amid-liquidity-concerns-93CH-3217371

2023-11-01 14:30

Copyrighted Image by: Reuters Coinbase (NASDAQ:COIN), a major cryptocurrency exchange, has announced plans to delist the Moss Carbon Credit (MCO2) altcoin due to asset-related issues and non-compliance with listing standards. The decision, set to take effect on November 14, 2023, comes as the token is trading at a significant 92% below its all-time high of $21.23, with a market cap of $4.55 million. MCO2 is unique to Coinbase and is not listed on other major exchanges such as Binance. It operates on an Ethereum-based platform and aims to tokenize companies' carbon credits. The creators of MCO2 have defended their token's distinctive purpose, emphasizing that they purchase carbon credits from environmental initiatives like the Amazon (NASDAQ:AMZN) Forest. Despite this unique approach, the token's performance and compliance issues have led to its upcoming delisting from Coinbase. InvestingPro Insights As we delve deeper into the financials of Coinbase, the InvestingPro data reveals a market cap of $17.46B, with a negative P/E ratio of -13.78, indicating that the company is currently not profitable. The data also shows a revenue of $2580.23M over the last twelve months as of Q2 2023, with a significant drop in revenue growth of -55.34%. Looking at the InvestingPro Tips, it's clear that the company's stock has faced some challenges recently. The stock has taken a significant hit over the last week, and the price has fallen notably over the last three months. Analysts do not anticipate the company will be profitable this year, and it has not been profitable over the last twelve months. These insights are crucial for potential investors considering Coinbase. It's worth noting that there are more tips and data available on the InvestingPro platform, which could provide a more comprehensive understanding of the company's performance. https://www.investing.com/news/cryptocurrency-news/coinbase-to-delist-moss-carbon-credit-altcoin-in-november-93CH-3217359