Oil prices up and gold stronger: a monthly review of Papua New Guinea’s commodity and financial markets

Oil prices continue their rise but LNG prices have eased. Cocoa and palm oil prices are slightly stronger. Business Advantage PNG’s monthly overview of commodity and financial markets.

Source: EIA

The oil price has continued its upward trajectory. According to Kina Securities, it is up 9.5 per cent over the month. It is up by almost a quarter over the year, according to Macrotrends and has increased by half from its 2017 low.

‘LNG prices are down 10.1 per cent over the month.’

The US Energy Information Administration (EIA) is predicting stable prices for 2018:

‘After falling in 2017, EIA expects global oil inventories to rise by 0.2 million b/d [barrels per day] in 2018 and by 0.3 million b/d in 2019. EIA forecasts the expectation of inventory builds in 2018 and 2019 will contribute to crude oil prices declining from current levels to an average of US$60/b during the first quarter of 2018. Prices are then expected to remain relatively flat through 2019.’

LNG prices are down 10.1 per cent over the month, according to Kina. But, over the year, the price has remained stable, according to ycharts.

Metals

The gold price over the last year. Source: kitco.com

  • Gold has weakened, according to Kina, falling by 3.7 per cent over the month. But it is up by 13 per cent over the year, according to kitco.com.
  • Silver prices also fell, according to Kina. They are down 1.7 per cent for the month but the price is up 8 per cent, according to infomine.com.
  • The copper price is down 3.1 per cent over the month, according to Kina, but is up by about a quarter over the year according to infomine.
  • Over the last month, cocoa prices rose by 5 per cent and palm oil prices are up by 1.8 per cent. Coffee prices, however, weakened by 0.8 per cent.

Equities

The KSi index, which includes dual-listed stocks, was up 4.1 per cent for the month, once again outperforming the KSi Home Index, which only rose by 0.3 per cent.

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‘A standout stock for the month was Oil Search.’

The Australian stock market moved sideways over the last month, but the S&P 500 was up 7.7 per cent in the month, according to Kina.

A standout stock for the month was Oil Search, whose share price increased 11 per cent, according to Kina. Kina Securities’ shares, which are dual-listed on the ASX, fell by 4 per cent over the month.

Over the last month, the kina was stable against the US dollar, but fell by 3 per cent against the Australian dollar.

Half-year Treasury Bills are trading at 4.73 per cent, while full-year Bills are trading at 8.04 per cent.

PNG 10-year government inscribed stock is yielding 11.53 per cent. By comparison, ten-year government bonds are yielding 2.66 per cent in the United States and 2.85 per cent in Australia!

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