• The relative price stability that characterised oil, in particular Brent, in the first half of 2014 has been shaken of late by unexpectedly severe sectarian turmoil in Iraq. However, with Iraqi exports largely unaffected, prices have now eased somewhat.
• European gas prices have continued to fall despite continuing tensions in Ukraine as inventories remain buoyant after a mild European winter. US gas prices have remained largely stable as inventories rebuild after a harsh US winter.
• Prices for bulk commodities were far less volatile in June than recent months. Iron ore recovered some ground (from a 21 month low), while metallurgical coal tracked sideways and thermal coal eased. Bulk commodity markets remain well supplied, with little prospect for strong price recoveries.
• Average prices across the base metals complex were mixed in the month, with nickel and copper giving back some of their gains (although both rallied late in the month). Tight physical supplies are supporting metals prices, while some recent positive economic data, particularly on China’s industrial sector, is fuelling slightly better optimism about the demand outlook. Aluminium and zinc posted the largest gains for the month.
• Gold prices rallied strongly over the month of June, supported by a variety of factors. Escalating political tensions in Iraq triggered demand for safe haven assets, while ECB easing and comments from the US Fed –which weighed on the USD –further contributed to investor demand for the metal. Signals for physical demand were relatively mixed, but the recent relaxation of Indian import restrictions has helped to lower domestic premiums and should lift official import volumes.

For further analysis download the full report.

• Commodity Update: Minerals and Energy – June 2014 (PDF, 490KB)