Five Key Charts to Watch in Global Commodity Markets This Week
(Bloomberg) -- Nippon Steel Corp.’s blockbuster takeover bid for an iconic American steelmaker is in jeopardy, with President Joe Biden armed with reasons to kill the deal in the coming days. Crude oil stockpiles at a major US hub are sinking. And a severe cattle shortage is hurting the US beef industry.
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Here are five notable charts to consider in global commodity markets as the week gets underway.
Steel
The outcome of Nippon Steel’s offer to buy United States Steel Corp. soon will be determined, with the final decision almost certainly resting with Biden. The Japanese steelmaker shocked the global industry a year ago when it announced its $14.1 billion bid, but the deal was met with fierce political backlash amid a contentious presidential election. Buttressed by Wall Street support on one side and disapproval by the influential United Steelworkers union on the other, US Steel’s stock has endured a roller-coaster ride over 12 months. Biden is said to be planning to block the deal, after receiving results of a government review by next week.
LNG
Liquefied natural gas traders are tracking any signs of emerging demand into 2025. Egypt, an LNG exporter until earlier this year, has unexpectedly popped up as an importer of the super-chilled fuel, creating additional competition from existing buyers in Europe and Asia. Egypt’s appetite for LNG is poised to increase overall demand for the Middle East and Africa through the first quarter of 2026, according to data from BloombergNEF.
Oil
Stockpiles at Cushing, Oklahoma — the delivery point for US crude futures — plunged by the most since early September after a 1.3 million barrel drawdown. That brings them to just 22.9 million barrels, their lowest seasonal level since 2008. Fewer imports from Canada probably contributed to the depletion, which comes as nationwide inventories fell modestly. Signs that demand is outstripping supply in the near term also is shown in futures trading, with West Texas Intermediate’s January contract trading Thursday at a 49 cent premium to the February contract.
Beef
A severe shortage of cattle, which has fueled grocery store price hikes and wiped out billions in meat-processor profits, is primed to get worse. The US beef herd already is the smallest since 1961 after years of depressed prices, severe droughts and surging costs forced farmers to send more females to slaughter. Now, the prospect of new tariffs and immigration reform risk constraining supplies even more. The US Department of Agriculture isn’t expecting a recovery in cattle inventory until 2027.