Commodity Update March 26, 2021: Global Commodities Drop as Congest at Suez Canal Extends

Commodity update as of 9:40 local time in Thailand on March 26, 2021

 

Asia Wealth Securities (AWS) stated that yesterday, WTI crude oil contract for May delivery closed at USD58.56 a barrel, down USD2.62 (4.3%). AWS further studied, the Suez Canal is a chokepoint that is one of the world’s most important fertilizers, accounting for 32% of the world’s marine transport. This includes rice and wheat that account for 17% of sea freight and 16% of sea freight. While there are now ships transporting crude oil and finished oil which encountered transportation problems from the above incident, it has not yet made any significant impact on the global crude supply, and the demand for crude oil remains affected by concerns over a slow economic recovery after several European and Asian countries resumed lockdown measures to curb the spread of COVID-19, including that in many countries in Europe announcement of the extension of lockdown measures, lastly, the Netherlands recently announced an extension of the lockdown measures until Apr 20, after the COVID-19 case was discovered and the number of people having to receive treatment in hospitals, including India, where lockdowns are announced in several areas after facing a new epidemic, including the fact that the COVID-19 virus with new species spread. From these issues, it will be negative for energy stocks which the downward price of crude oil will benefit TASCO, TOA, EPG, GULF, BGRIM, GPSC, OSP, BJC, BGC and CPALL.