Crude Oil and Wheat Prices Surge Amid Supply Disruptions
The global commodities market saw significant gains last week, driven by buying pressure in crude oil and wheat. According to the Vietnam Commodity Exchange (MXV), world crude oil prices reversed their losses from the previous week, rising sharply due to supply disruptions in the Middle East and the Black Sea. The risks of supply disruptions continued to support oil prices despite weakening demand prospects and a sharp increase in US crude oil inventories.
Oil prices rose at the start of the week as tensions between the US and Iran escalated, with Tehran demanding compensation from Washington before reopening shipping lanes through the Strait of Hormuz. Meanwhile, US President Donald Trump also demanded reparations from Iran, dampening expectations of an agreement.
The upward trend continued as Iran asserted that the Strait of Hormuz would remain closed if Washington did not change its stance. Shipping data showed only six ships passed through the strait on the first day of the week, lower than the 10-day average of around 11 ships and a far cry from the 125-140 ships per day before the conflict intensified.
However, oil prices are under pressure from weakening demand signals and sharply rising inventories. The U.S. Energy Information Agency (EIA) reported that commercial crude oil inventories rose by 17.4 million barrels in the week ending August 7, reaching 424.4 million barrels.