Bridging Money and Real World Assets: Dive into the Bullish Copper Market !

• By purchasing Tempestas Copper Assets at the current daily market price, you receive the irrevocable rights to the amount of copper tied to the Tempestas Copper Assets.

Invest in mineable and secured Tempestas Copper Assets, start with 1 pound of copper and

Get Your Bonuses Today. 

OPEC+ Likely to Maintain Output Cuts Amid Market Volatility

Crude Prices Recover Amidst Continuing Challenges

After a three-day decline, crude oil prices witnessed a slight recovery on Thursday. Despite the uptick, the broader market sentiment continues to be cautious. Brent oil futures saw a 0.7% increase to $82.45 a barrel, while West Texas Intermediate crude also rose by 0.7% to $78.14 a barrel. These modest gains followed a more than 1% fall for both benchmarks on Wednesday, marking their third consecutive day of losses.

Market Pressures and Geopolitical Factors

The recent downturn in the market has been influenced by a combination of rising oil inventories, subdued demand, and weakening refinery margins. Additionally, the potential for run cuts adds to the challenges facing the oil sector. While geopolitical risks have somewhat diminished, they remain a factor in market dynamics, with global oil inventories continuing to build through April and into May, as evidenced by high-frequency data from both global and U.S. sources.

Investor Sentiment and Market Trends

The bearish trend in crude oil prices is further compounded by the liquidation of net length across the crude oil complex by funds. This shift indicates a significant erosion in the geopolitical risk premium that had previously supported higher prices.

OPEC+ Strategy in Focus

Given the current market environment, there is a strong expectation that OPEC+ will extend its production cuts through the third quarter. Moreover, projections suggest that these cuts could continue through the end of 2024 and into the first half of 2025. The upcoming June meeting of OPEC+ is critical, and any indications of tapering production cuts or discord among the member countries could negatively impact prices in the near term. While a decision to implement deeper cuts would be unexpected, it could potentially bolster market prices, though such a move is considered unlikely.

European Gas Prices Reach Seasonal Peak Amid Supply Concerns

Significant Price Increase in Natural Gas

European natural gas prices soared to their highest levels since the start of the year, with TTF benchmark prices climbing 4.2% to close at nearly €34.39 per megawatt-hour. This sharp increase is primarily attributed to concerns over potential disruptions in gas supply from Russia.

Potential Supply Disruptions from Russia

The rise in prices follows a declaration from an Austrian energy firm about a possible interruption in Russian gas flows to Austria. This potential disruption stems from a legal ruling that might hinder payments to a major Russian gas exporter for deliveries. The finality and effect of this court decision are still pending, creating uncertainty in the supply chain.

Austria's Dependency on Russian Gas

Austria's energy supply is particularly vulnerable, as a significant proportion of its gas imports—93% in recent observations—comes from Russia. The country faces a potential market squeeze locally if the supplies are indeed halted, although it is anticipated that Europe, in general, might manage to navigate the shortfall without severe repercussions.

Market Response and Investment Shifts

In response to these developments, investment funds have made notable adjustments in their market positions. As observed, there was a reduction in net long positions in TTF futures, with a significant decrease of 11.66 million contracts, bringing the total down to 91.55 million contracts. This retreat from earlier positions marks the market's first pullback since the beginning of spring and reflects broader concerns impacting the energy sector.

Copper Prices Set to Surge, Predicts Andurand

Copper at the Center of Energy Transition

Hedge fund manager Pierre Andurand is predicting a significant rise in the price of copper, projecting that it could reach as much as $40,000 per tonne in the coming years due to escalating global demand and dwindling stockpiles. This surge in demand is anticipated as the world moves towards greater electrification, encompassing everything from electric vehicles and renewable energy sources to military applications and data centers.

Andurand's Commodities Fund Sees Major Turnaround

After experiencing a significant setback last year with a 55% loss due to unsuccessful oil bets, Andurand’s $1.3 billion Commodities Discretionary Enhanced fund has made a robust recovery, boasting an 83% increase this year. This recovery is credited to gains across a broad range of commodities.

Future Projections and Market Dynamics

Andurand, a prominent figure in the commodity trading world, suggests that copper's price could quadruple within the next few years as it struggles to meet the sharply rising demand. He acknowledges that although a price peak of $40,000 may not be permanent, the response from suppliers to meet this demand could take over five years, further straining the available resources.

Challenges in Expanding Copper Supply

The commodity trader highlights the challenges in increasing copper supply, noting that the industry typically requires about 15 years to develop a new mine. Current mining efforts are insufficient to match the growing demand, a situation underscored by major mining companies' strategies to acquire competitors with existing copper mines rather than developing new sites.

Reflections on Past Predictions and Market Stability

Andurand also reflects on past projections, such as his prediction of oil reaching $140 a barrel, which did not materialize despite geopolitical tensions. This experience has instilled a more cautious approach to commodity trading, particularly oil, where he now predicts price stability despite ongoing global conflicts.

Andurand’s Broader Commodities Outlook

Beyond copper, Andurand is optimistic about other commodities, including cocoa and aluminum, which he believes will continue to rise in price due to similar dynamics affecting the copper market. Aluminum, in particular, is seen as a potential substitute for copper, which could drive its demand and price upward in parallel with copper's expected surge.