It’s a busy week for earnings, with Exxon Mobil Corp., Chevron Corp., TotalEnergies SE and Eni SpA kicking off Big Oil’s reporting season. In metals, the world’s top gold producer Newmont Corp. and No. 3 Agnico Eagle Mines Ltd. also post results in the days ahead, while crop traders Archer-Daniels-Midland Co. and Bunge Ltd. headline agriculture companies.
(Bloomberg) — It’s a busy week for earnings, with Exxon Mobil Corp., Chevron Corp., TotalEnergies SE and Eni SpA kicking off Big Oil’s reporting season. In metals, the world’s top gold producer Newmont Corp. and No. 3 Agnico Eagle Mines Ltd. also post results in the days ahead, while crop traders Archer-Daniels-Midland Co. and Bunge Ltd. headline agriculture companies.
Here are five notable charts to consider in global commodity markets as the week gets underway.
After a dismal start to the year, US energy stocks posted a strong rebound in the third quarter — with the S&P 500 Energy Index the top performer among the S&P 500’s 11 industry groups — as record oil demand and a surge in crude prices helped boost shares. As Exxon and Chevron report earnings for the period on Friday, investors will be focused on production forecasts as well as assumptions for the months ahead, especially as tensions in the Middle East are poised to bring further price volatility to markets and raise questions over future supplies. For Exxon, analysts will be keen to learn more about its blockbuster $60 billion acquisition of Pioneer Natural Resources Co., which has left many wondering about the strategic promise of Chief Executive Officer Darren Woods’s shale bet.
With winter in the Northern Hemisphere right around the corner and the conflict between Israel and Hamas ratcheting up, volatility is returning to the natural gas market, one that the International Gas Union describes as “undersupplied.” While the supply picture is much better than last year in Europe, prices there are still at historically high levels. Moreover, a shrinking gap between natural gas expressed in oil-equivalent terms and Brent crude prices signals the existence of elevated risks rattling the market. Mild weather for now has kept a lid on Dutch front-month futures — the European benchmark — but the market is bracing for further sharp price moves, especially if the weather turns colder, boosting demand for the heating fuel.
Shares of Newmont, which reports earnings on Thursday, have tumbled 18% this year after falling below their key 50-day moving average on Friday. Such a move is seen by some chart watchers as a bearish signal. The weakness has come despite a backdrop of historically elevated gold prices, as well as the Denver-based company’s $15 billion acquisition of Newcrest Mining Ltd. — Australia’s biggest gold miner. That transaction helps solidify Newmont’s global lead over other bullion mining rivals like Barrick Gold Corp., which reports results next week. The takeover also offers the US giant greater exposure to copper — a metal where demand is expected to outpace supply as the transition away from fossil fuels gathers pace.
Soybean processing margins are an important indicator of potential returns for producers. Profits from crushing the oilseed into animal feed and cooking oil have rebounded since June as a poor harvest in Argentina boosted demand for American crops, even as the prices for soybean futures and soybean oil have weakened. At the same time, increased demand from the renewable-diesel industry and a bumper crop in Brazil have helped lift margins. Earnings reports from crop traders ADM and Bunge should provide investors with further insight into the metric, as well as the overall performance of their agribusiness segments.
The bad news is piling up in the solar industry. Last week, shares of SolarEdge Technologies Inc. tumbled after the company warned that third-quarter revenue will be well below its guidance, citing “substantial” cancellations and delayed orders. Rival Enphase Energy Inc. — which also supplies inverters that are needed with solar power installations — dropped 15%. Shares of rooftop solar installer Sunnova Energy Inc. also slumped. The downbeat results from SolarEdge underscore investor concerns about the prospects of rooftop solar installers who have seen their inventories pile up as potential customers face higher borrowing costs and other economic headwinds. Both Enphase and Sunnova report earnings this week.
–With assistance from Mark Chediak, Will Wade and Tarso Veloso.
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