(Bloomberg) -- Earnings season is upon us, with BP Plc kicking off third-quarter results for the oil supermajors on Tuesday. Meanwhile, earnings reports from gold producers are rolling in. In agriculture, prices for the world’s most widely used vegetable oil are soaring, reigniting concerns about food inflation.
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Here are five notable charts to consider in global commodity markets as the week gets underway.
Oil
Exxon Mobil Corp., Chevron Corp., Shell Plc, TotalEnergies SE and BP are collectively expected to post a 12% profit decline from the second quarter when they report earnings this week. This would leave all but Shell unable to cover their dividends and buybacks with free cash flow, which is expected to be 30% lower than a year ago. Share buybacks have become a cornerstone of Big Oil’s strategy as a post-Covid commodities rally spurred record profits and provided an opportunity to court investors betting against a fast energy transition. With cash now short, payout pledges made during good times are under strain.
Gold
As the world’s gold companies start rolling out their quarterly reports, all eyes are on margins and costs to see if they’re cashing in on gold’s rally to repeated records. Newmont Corp., which kicked off earnings season last week, disappointed Wall Street with higher mining costs than expected. Investors will be watching other miners to see if top-producing Newmont is the start of a trend or just an outlier. Agnico Eagle Mines Ltd., the third-largest gold producer, reports results on Wednesday, followed by No. 2 Barrick Gold Corp. on Nov. 7.
Palm Oil
Palm oil futures are trading near their highest levels since July 2022, rekindling concerns about rising food costs. The world’s most-consumed cooking oil has rallied more than 20% this year on weaker output in Indonesia and Malaysia, which collectively account for more than 80% of global supply. The tropical commodity is found in everything from cookies and ice cream to shampoo and animal feed. While its price remains far from a record, palm’s advance adds to a recent uptick across global food staples that could eventually flow through to higher grocery bills. Palm oil futures swung between gains and losses Monday.
Wind
The world’s renewable power goals have a wind problem. Annual solar and wind additions were neck and neck a decade ago, but today solar has soared far ahead while the wind industry stagnates due to rising costs and supply chain bottlenecks. That’s a major problem for government aspirations to pivot from fossil fuels, especially in places like northern Europe, where wind farms tend to produce the most electricity during the winter when demand is highest and sunshine is scarce.
Natural Gas
Tankers that transport liquefied natural gas have a global problem: too many vessels and not enough supply or demand. The cost of renting an LNG tanker on a short-term basis has fallen to the lowest for this time of year since at least 2018, data from shipbroker Fearnleys A/S show. The atypical decline — shipping rates usually soar in the run-up to the heating season — reflects a temporary surplus of vessels amid delays to some new LNG plants, and a geographical segmentation of trade.
--With assistance from Anna Shiryaevskaya, William Mathis and Doug Alexander.
(Updates with market move for palm oil in fifth paragraph.)
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