Oil prices are showing signs of recovery, but gas prices continue to move sideways. Silver is surging and gold prices are strong over the year. Business Advantage PNG’s monthly overview of commodity and financial markets.

The long term gas price in nominal and inflation adjusted terms. Source: oilprice.com

Oil prices continue to show signs of recovery, although concerns remain about excess supply. West Texas Intermediate is trading at US$45.93 a barrel, according to Kina Securities, down 2.1 per cent over the month, but up 25.3 per cent for the year.

Gas prices are steady in the short term, but down 21.8 per cent for the year. Japan/Korea LNG prices are $US5.42 per million British Thermal Units (BTU).

 ‘It appears the 2006-2011 period for oil and natural gas were historically high prices.’

According to oilprice.com, gas prices are trading within their historical range. The site says when there have been higher prices, they have all been ‘spikes’ due to hurricanes, La Nina events or other short term phenomenon. ‘It appears the 2006–2011 period for oil and natural gas were historically high prices.’

Minerals

Gold continues to be strong. According to Kina, it is trading at US$1,344.10 an ounce, which is up 2 per cent for the month and 26.6 per cent for the year.

The long term silver price. Source: Bloomberg

Silver prices, after a short term dip, have recovered to US$19.60 per ounce, which is up 3.9 per cent over the month and 40.7 per cent over the year.

According to bulliondesk.com, the strength of the precious metal is due to a strong rebound in speculative and investor demand. Silver is still well below its 2011 peak, however.

Copper is steady. The price is up 5.7 per cent for the month, according to Kina, but only 2.4 per cent for the year.

Agricultural commodities

Cocoa prices, at US$2,845 per metric tonne, have weakened. They are down 3.4 per cent over the month and 11.9 per cent for the year.

‘Malaysian palm oil is also strong. It is up 3.9 per cent for the month.’

Coffee prices, by contrast, are strong. They are up 6.6 per cent for the month and 24.2 per cent for the year.

Malaysian palm oil is also strong. It is up 3.9 per cent for the month and 25.5 per cent for the year.

Equities

There continues to be a variance between dual-listed equities and domestically listed equities on the Port Moresby Stock Exchange. The KSi Home Index (stocks listed only in PNG) is up 4.1 per cent over the month, and 10.6 per cent for the year. By contrast, the KSi index (which includes dual listed stocks) fell slightly by 0.8 per cent over the month but is up 39.4 per cent for the year.

‘In terms of individual stocks, Bank South Pacific is a standout performer.’

However, both indices are outperforming the US Standard & Poors 500, which is only up 4 per cent over the year, and the Australian All Ordinaries Index, which is up 3.3 per cent for the year.

In terms of individual stocks, Bank South Pacific is a standout performer. It is up 4 per cent for the month and 20 per cent for the year.

Newcrest Mining, which recently sold its stake in the Hidden Valley gold mine to Harmony Gold, is up 76 per cent over the year.

The dual listed Oil Search is down 2.9 per cent for the month but up 20.9 per cent for the year.

Half year Treasury Bills are trading at 4.72 per cent, while full year Bills are trading at 7.71 per cent.