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Wednesday, August 17, 2022

Rubber Swings Near One-Month Low on Oil Rebound, Yen Strength

Rubber swung between gains and losses, trading near a one-month low, as a rebound in crude oil prices weighed against concern that the Federal Reserve will reduce stimulus earlier than anticipated.

The contract for delivery in April on the Tokyo Commodity Exchange was little changed at 255.8 yen a kilogram ($2,591 a metric ton) at 12:08 p.m. after gaining 0.3 percent and dropping 0.7 percent. Futures settled at 255.7 yen yesterday, the lowest close for a most-active contract since Oct. 4.

West Texas Intermediate rebounded from the lowest level in five months before a government report that may show U.S. fuel supplies shrank. Faster-than-estimated expansion in a U.S. services gauge stoked speculation the world’s largest economy is strong enough to allow the Fed to reduce stimulus earlier than analysts had projected.

Investors remain cautious about the direction of rubber after crude rebounded and the timing of the Fed’s tapering remains unclear, said Naohiro Niimura, a partner at research company Market Risk Advisory in Tokyo.

Rubber for May delivery on the Shanghai Futures Exchange was little changed at 19,475 yuan($3,195) a ton. Thai rubber free-on-board dropped 0.3 percent to 77.85 baht ($2.49) a kilogram yesterday, according to the Rubber Research Institute of Thailand.

Source: Bloomberg

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