Commodities Falling, Economic Surprises, Debt Ceiling Expectations
May 19, 2023 | FIRESIDE CHARTS
The price of oil is near its 52-week low, but this hasn’t translated to lower prices at the pump for consumers. Oil isn’t the only commodity showing weakness as investors being to sour on the asset class. Demand for commodities is likely to be lower than expected as optimism about the reopening Chinese economy fades. Industrial production surprised in both the U.S. and Europe but in opposite directions. Will congress raise the debt ceiling in time?
1. OPEC’s production cut announcement in April only buoyed prices temporarily:
Source: The Daily Shot 5/15/2023
2. U.S. crude oil inventories are near the midpoint of the range for the past five years:
Source: The Daily Shot 5/18/2023
3. Despite more oil, gasoline stocks have remained near low due to a lack of refining capacity:
Source: The Daily Shot 5/18/2023
4. The Bloomberg Industrial Metals Subindex includes Aluminum, Copper, Nickel, and Zinc:
Source: The Daily Shot 5/16/2023
5. Many investors were drawn to commodities as they were one of the few bright spots in 2022:
Source: BofA Global Research
6. The Chinese economy is improving, but it’s not following the same rapid rebound that’s been experienced in developed markets:
Source: BofA Global Research
7. Increasing production of automobiles is a welcome sign. Low inventories have continued to prop up automobile pricing:
Source: Wells Fargo Securities
8. Capital Goods production in Germany slowed down more than expected:
Source: The Daily Shot 5/16/2023
9. Read more about our thoughts here:
Source: BofA Global Research
Disclosure: The charts and infographics contained in this blog are typically based on data obtained from 3rd parties and are believed to be accurate. The commentary included is the opinion of the author and subject to change at any time. Any reference to specific securities or investments are for illustrative purposes only and are not intended as investment advice nor are they a recommendation to take any action. Individual securities mentioned may be held in client accounts. Past performance is no guarantee of future results.