Five Key Charts To Watch In Global Commodity Markets This Week

(Bloomberg) -- After a late summer lull, the event calendar is starting to fill up again in the world of commodities. Singapore will host the three-day APPEC oil and energy industry conference starting Monday as well as the four-day Gastech 2023 Conference starting Tuesday. Meanwhile, natural gas investors will be focused on the Australian labor disputes that have roiled markets over the past month with work stoppages slated to begin at two Chevron Corp. facilities as soon as Thursday.

Here are five notable charts to consider in commodity markets as the week gets underway.

Oil

September may be in its early days, but the rally in oil appears to have finally secured solid footing. Both West Texas Intermediate and Brent futures are positive on the year, having posted three straight monthly advances thanks in large part to a tightening market amid production cuts from Saudi Arabia and Russia. Industry experts and traders will convene at APPEC for a series of sessions focused on the most critical issues facing the sector, oil's role in the future energy mix and growth opportunities.

Natural Gas

Workers at Chevron's liquefied natural gas export plants in Australia are planning to strike for up to 11 hours a day beginning Thursday, threatening to disrupt production in one of the world's biggest producers. Unions will start a week of so-called work stoppages at the Gorgon and Wheatstone Downstream plants, according to documents seen by Bloomberg. Shorter strikes are planned at the Wheatstone Platform facility, the documents said. The plants made up roughly 7% of global LNG supply last year.

Metals

Spot prices of lithium carbonate — a refined form of lithium — have been on a wild ride. They surged to a record in November as efforts to decarbonize the transportation sector boosted consumption, before plunging this year as supply pressures eased. Even so, the appetite for the indispensable metal in the making of electric-vehicle batteries is set to grow. Chile — host of a lithium forum on Wednesday in Santiago — has the world's largest reserves and is the No. 2 supplier, after Australia. According to BloombergNEF, demand for the metal will be 16 times the total lithium in use today by 2040, potentially outrunning supply by more than 40%.

Diesel

Retail diesel costs are rapidly rising in the US much earlier than usual this year, potentially inflating the cost of farming, heating, trucking and construction. That's a cautionary flag as just about everything that makes up the economy runs on diesel in some way. The culprit? Excessive heat partly led to a slew of refinery outages across key regions in the US Gulf Coast and Europe, where stockpiles were already low. After a relatively calm start to 2023, large daily price gains have been the norm since mid-July, leading to a 9.3% surge in August and the first back-to-back monthly advance since last summer. 

Power

With the Atlantic hurricane season heading into its most-active period, it's a good time to take a look at Florida's power market, which often takes a hit from natural disasters. Over the past two decades, natural gas-fired generation has accounted for an increasing share of the electricity mix, from 31% in 2002 to 75% last year, according to US Energy Information Administration data. The shift has come at the expense of coal- and oil-fired generation, which made up just 6% and 1%, respectively, of the total in 2022. Looking ahead, planned plant additions and retirements will continue to change the generation mix in the Sunshine State, with solar expected to grab a growing foothold.

--With assistance from Stephen Stapczynski and Chunzi Xu.

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