Gas prices rose sharply, but oil and copper were down. Business Advantage PNG’s monthly review of Papua New Guinea commodities and financial markets.

The oil price (blue) versus the gas price (orange) over the last year. Source: MacroTrends

LNG prices were up sharply, rising by 13.5 per cent over the month, according to Kina Securities. It means that the price has almost clawed back its medium-term losses; it is only 2.3 per cent lower than a year ago.

Oil prices, however, were weaker, with West Texas Intermediate down 7.3 per cent over the month.

According to Oil Price the deal to cut global crude oil production, struck by the Organisation of Petroleum Exporting Countries (OPEC) in December 2016, has resulted in prices more than doubling. But that deal may be nearing its end.

‘Brokered by Algeria, the deal to cut production volumes—following OPEC’s 2014 attempt to break the US shale oil industry by permitting the global supply overhang—nears its official end in the second half of the year,’ writes Oil Price.

‘The cocoa price continued to ease.’

‘Questions over the future of OPEC production, in light of OECD crude oil stockpiles falling below the cartel’s targeted five-year averages, now lingers over the market.’

Cocoa

The cocoa price continued to ease, dropping 3.6 per cent over the month, but it is still up almost a third over the year, according to Kina. Coffee was down 6.6 per cent for the month and has come off by over a tenth over the year.

Gold was off 2.9 per cent over the month and 3 per cent over the year.

‘Russia is currently the world’s third biggest gold miner after Australia and China.’

According to Russia Today, major Russian gold mining companies are planning to double production; such an increase would make Russia the world’s second-largest producer of the precious metal.

Russia is currently the world’s third biggest gold miner, after Australia and China.

Silver was down 1.7 per cent over the month and 4.3 per cent over the year.

‘The Australian All Ordinaries Index was up 3.1 per cent over the month.’

Copper continued to lose some of its recent gains. The price weakened by 1.8 per cent over the month and is down 7.8 per cent over the year according to Kina.

Equities

The stock market showed little movement. The KSI Home Index (PNG-listed stocks only) moved sideways, rising 0.1 per cent per cent over the month, according to Kina. The annual return is 2.2 per cent.

The KSI Index (which includes dual listed stocks) continued its slide. It was down 2.8 per cent over the month and 4.6 per cent over the year.

The Australian All Ordinaries Index was up 3.1 per cent over the month, while America’s S&P 500 also had a monthly return of 0.8 per cent.

On the currency markets, the kina fell by 2.4 per cent against the Australian dollar, but was steady against all the other major currencies.

Half year Treasury Bills are trading at 4.72 per cent, while full year Bills are trading at 8.04 per cent. Three-year inscribed stock has an interest yield of 9.5 per cent.