According to the Mercantile Exchange of Vietnam (MXV), in yesterday's trading session (August 28), the global commodities market faced strong selling pressure. In the energy market, the prices of 4 out of 5 commodities simultaneously declined, with oil prices extending their weakening trend as U.S. inventory data showed a smaller-than-expected decrease. Red dominated the industrial materials market, with raw sugar, cotton, and cocoa all seeing price drops. At the close of the session, the MXV-Index decreased by 1.04% to 2,136 points.

Energy Market "In the Red," Oil Prices Continue to Weaken

At the end of the trading session on August 29, except for natural gas, all other commodities in the energy group were in the red. Notably, global oil prices continued their downward trend as U.S. inventory data showed a smaller-than-expected decrease, coupled with concerns over demand growth. At the close, Brent crude oil prices fell by 1.13%, to $78.65 per barrel, while WTI crude oil prices dropped by $1.01, equivalent to 1.34%, to $74.52 per barrel.

Specifically, according to a report from the U.S. Energy Information Administration (EIA), U.S. commercial crude oil inventories for the week ending August 23 decreased by 846,000 barrels, a smaller decline compared to the market's expectation of a 2.3 million barrel reduction. Meanwhile, gasoline inventories decreased by 2.2 million barrels, while distillate fuel inventories slightly increased by 275,000 barrels.

Earlier, a report from the American Petroleum Institute (API) indicated that U.S. inventories for the same period had decreased by 3.4 million barrels. The EIA's figures, which fell short of market expectations and the API's earlier report, added pressure to the market.

Furthermore, concerns about slow economic growth in China, leading to reduced demand, continued to weigh on oil prices. Recent data has shown that the Chinese economy is struggling, and refinery demand for oil is not high. The gloomy outlook from China continues to erode investor confidence in the market.

Additionally, according to vessel tracking data compiled by Bloomberg, Russia's seaborne crude oil exports have risen back to their highest level in nearly two months, driven by a recovery in shipments from the Sakhalin project. Russia's four-week average crude oil exports rose to 3.26 million barrels per day in the week ending August 25, up by 60,000 barrels per day compared to the previous period. On a weekly basis, Russia's seaborne exports increased by 390,000 barrels per day to reach 3.35 million barrels, the highest level in three weeks.

Despite Reduced Production, Global Raw Sugar Prices Decline

In yesterday's trading session, the industrial materials market experienced mixed movements. At the close, several commodities saw price declines. Raw sugar prices reversed course, dropping by 0.41% after five consecutive sessions of gains, despite a decrease in sugar production compared to the same period last year. The sugarcane industry group UNICA reported that sugar production in the first half of August in the South-Central region—Brazil's largest producing area—reached 3.11 million tons, down 10.2% compared to the same period in 2023. Previously, a survey by S&P Global Commodity Insights showed production at 3.29 million tons, down 5.2% compared to the first half of August 2023.

Cotton prices fell for the third consecutive session, mainly due to the strengthening of the Dollar Index and the weakening of crude oil prices in yesterday's session. During cotton trading, the Dollar Index surged by nearly 1%, making cotton more expensive for customers holding other currencies. The increased cost limited buying power in the market.

Additionally, crude oil prices dropped by more than 1%, making polyester—a substitute for natural cotton made from crude oil—cheaper. This also dragged cotton prices down, contributing to the decline in yesterday's session.

After reaching a record high in more than two months, cocoa prices cooled down on Tuesday (August 27). At the close of yesterday’s session, cocoa prices continued to decline by more than 1%.

Source: MXV