Crude oil prices punched to the highest price since last October, hitting $50.21 per barrel on Thursday. Prices have nearly doubled since falling near $26 in February, rising as global oil production has slowed, especially due to output shortfalls in Canada, Libya, and Nigeria.
US crude oil production has also been slowing recently and is down nearly 10% compared to this time last year. The drilling cutback and increasing refinery demand for the summer driving season have helped to cut into US oil stockpiles, but they still are near record-breaking levels. US inventories stand now near 540 million barrels, the equivalent of almost one month’s worth of American consumption.
As a result of the still-massive US supply and fears that drilling rates could bounce back with prices near $50 per barrel, some analysts are expecting prices to pull back soon.
After traders return from the Memorial Day weekend, they’ll be awaiting the June 2 OPEC meeting, where the world’s major oil producers are meeting to update production quotas.
Dark Clouds over Soybeans
Wet weather has been plaguing Midwestern soybean farmers, flooding fields and slowing planting. While over half of the bean crop has been planted, some farmers are worried about getting the rest of their soybeans in the ground.
This has helped boost prices, with July soybean futures nearing $11.00 per bushel, the highest price in almost two years.
Sugar prices exploded near a two-year high this week, topping 17.5 cents per pound. Prices are rising as global demand stays strong in the face of shrinking supplies. Global sugar crops were hurt this year by the El-Niño phenomenon, which brought dry weather to Thailand and India, the world’s second- and third-largest sugar producers.
Meanwhile, prices have been getting boosted by investors who are buying the sweetener on hopes of a continued rise. While prices have already risen sharply from a low near 10 cents per pound, the sugar bulls are hoping that prices could return to 2011’s high over 36 cents per pound.