According to the Mercantile Exchange Of VietNam (MXV), the global raw material commodity market showed mixed trends on June 10. The energy and metal sectors were predominantly in the green. Meanwhile, agricultural commodities and industrial raw materials experienced downward pressure. However, overall, buying pressure prevailed, helping the MXV-Index to reverse and recover by 0.55%, closing the day at 2,291 points.

Oil Prices Rise to One-Week High

At the close of trading on June 10, oil prices regained upward momentum, recovering strongly to the highest level in a week. Specifically, WTI oil prices increased by 2.93% to 77.74 USD/barrel. Brent oil prices rose by 2.52% to 81.63 USD/barrel.

MXV reported that oil prices received strong support from expectations of increased fuel consumption during the peak travel season, amid concerns about still-tight supply due to the production cut policies of the Organization of the Petroleum Exporting Countries and allies (OPEC+).

Analysts forecast Brent crude oil prices to rise to 86 USD/barrel this summer amid strong consumer demand, which is expected to create a market deficit of 1.3 million barrels per day in the third quarter, according to a report from Goldman Sachs.

The Wall Street bank has revised its estimate for oil demand growth this year, adding 200,000 barrels per day to 1.25 million barrels per day, emphasizing positive jet fuel consumption.

Goldman Sachs also believes that Brent oil prices will be supported at the 75 USD/barrel level due to physical crude oil demand, which tends to increase amid lower prices, including in China and the U.S. to refill the Strategic Petroleum Reserve (SPR). Over the past weekend, the U.S. Department of Energy announced two additional purchase invitations for the SPR, including 1.5 million barrels for delivery in September and an additional 4.5 million barrels for October, November, and December. This has significantly boosted oil prices in yesterday’s session.

Energy consultancy FGE also expects oil prices to recover, with prices averaging around 80 USD/barrel in the third quarter.

The trend of production cuts by OPEC+ during the peak consumption season in the third quarter has significantly supported oil prices. Meanwhile, the output of the world’s largest producer, the U.S., is expected to decline next year, further emphasizing the risk of supply shortages.

According to Bloomberg, U.S. oil production will decrease by about 1 million barrels per day in the second half of 2025 unless the number of rigs increases significantly. The shale oil boom has driven the U.S. to produce more crude oil than any other country in history, but growth is expected to slow. Surveys show U.S. oil production will remain at 12-13 million barrels per day for the next 6 to 9 months, and if the number of rigs does not substantially increase, production may continue to decline.

Cotton and Coffee Prices Weaken

The coffee market extended its downward trend from the previous weekend. At the close, September Arabica coffee futures fell 1.29%, and Robusta coffee futures for the same period lost 1.11% of their value. According to MXV, yesterday’s decline in coffee prices was primarily due to selling pressure from Brazil rather than supply and demand factors.

The Dollar Index rose by 0.25% in yesterday’s session, pushing the USD/BRL exchange rate to its highest level since January 2023. The continued depreciation of the Brazilian Real against the USD could stimulate coffee sales by farmers in the world’s largest coffee-producing country to earn foreign currency. Increased coffee supply on the market helps bolster supply and pressures prices.

Additionally, as of June 4, the net long position in coffee had increased to 46,543 contracts. Excessive buying could lead speculators on the market to temporarily adjust towards selling, especially as the U.S. Federal Reserve (FED) is unlikely to lower interest rates in its June meeting.

Moreover, Brazil continues to ramp up coffee exports despite the 2024-2025 coffee harvest not being as positive as previously expected. The Brazilian government reported that in May, the South American country exported 243,900 tons of coffee, an increase of 72.87% compared to the same period last year.

Similarly, cotton prices fell sharply by nearly 3%, reaching the lowest level in 20 months. Weak demand for U.S. cotton, combined with the strengthening of the USD, exerted double pressure on prices. In the weekly export report ending on May 30, the U.S. Department of Agriculture (USDA) stated that the amount of cotton exported during the week decreased by 9% compared to the previous week and 27% compared to the 4-week average, down to 157,000 bales. The low export volume was mainly due to previously reduced sales as demand weakened.

Additionally, the Dollar Index surged in the last two sessions, making the cost of investing in and holding cotton more expensive. This also significantly limited the buying power for cotton in yesterday's session.

Source: MXV