• Commodity prices remained divergent in July, reflecting broadly positive but somewhat mixed economic data as well as flaring geopolitical tensions in Ukraine and the Middle East.
• Crude prices fell in early July as concerns about a disruption to Iraqi oil supplies dissipated. Brent and Tapis have been flat since mid-July whereas WTI increased on the back of falling inventories at Cushing Oklahoma to almost reach parity with Brent by late July before falling in early August.
• US natural gas prices continued to decline over July as mild weather reduced demand for gas fired electricity generation, whereas European prices ticked up in late July in response to heightened tensions in Ukraine.
• Iron ore was volatile during the month but edged lower towards the end before increasing marginally – slowing Chinese real estate demand and increased Australian domestic production may have contributed.
• The Australian Government approved what is speculated to be the largest domestic coal mine – Carmichael. It is forecast to produce 60 million tonnes of thermal coal per annum, which may further drive down already subdued prices. Thermal and metallurgical coal closed lower on higher supply capacity.
• Base metals (zinc, copper, aluminium and lead) all trended upwards on improving Chinese and US economic data. In comparison, nickel rose early in the month and then trended downwards. Meanwhile, geopolitical tensions in the Middle East intensified causing the index of volatility (VIX) to spike before reverting back to recent subdued levels. Investors flocked to gold, but lived a short rally as demand was offset by better US economic data.

For further analysis download the full report.

• Commodity Update: Minerals and Energy – July 2014 (620 KB, PDF)