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:
6. The Chinese economy is improving, but it’s not following the same rapid rebound that’s been experienced in developed markets:
7. Increasing production of automobiles is a welcome sign. Low inventories have continued to prop up automobile pricing:
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: