Oil and gas prices are up and copper is also strong. Business Advantage PNG’s monthly review of Papua New Guinea commodities and financial markets comes to you from this week’s PNG Mining and Petroleum Conference in Port Moresby.

According to Kina Securities, the oil price has strengthened. West Texas Intermediate has risen by 11.2 per cent over the month, a continuation of recent volatility. The oil price is up by 9 per cent this year.

LNG prices are also strong, according to Kina. LNG Japan/Korea is up 9.5 per cent for the month and 23.4 per cent for the year to date.

The PNG Chamber of Mines and Petroleum’s Gerea Aopi

Gerea Aopi, President of the PNG Chamber of Mines and Petroleum, says the outlook for commodity prices is improving. ‘The good news is that there is recovery and the recovery is occurring in the petroleum sector,’ he said.

‘We can now see clear signs of a way forward.’ He added that PNG has ‘world class projects’ that are competitive.

Aopi said the improvements are likely to be slow, however, and prices are unlikely to return to pre-2014 levels. He warned that unless there is a ‘balance of risks and rewards’, the domestic resources sector’s ‘future development will be in jeopardy.’

Metals

‘We can now see clear signs of a way forward,’ said Aopi. ‘In recent weeks, prices have improved in key sectors; gold, nickel, cobalt and of course copper.’

Precious metals prices have continued to show strength. Gold was up 2 per cent for the month and has risen 12.5 per cent over the year, according to Kina.

The silver price was up 2.2 per cent over the month, and is up 7.4 per cent for the year to date.

Copper came off slightly, but remains strong. It was down 0.3 per cent over the month, according to Kina, but has risen 26.5 per cent over the year.

Agriculture

Agriculture prices continue to be weak. The palm oil price fell sharply. It is down 9.2 per cent for the month, according to Kina, and 21.4 per cent for the year.

The cocoa price also continued to be weak. It was down 0.4 per cent for the month and is off 0.3 per cent for the year.

Coffee prices remained unchanged for the month but down 9.1 per cent for the year.

Equities

The stock market did little. The KSI Home Index (PNG-listed stocks only) rose was unchanged over the month, but is up 3.9 per cent over the year. The KSI Index (which includes dual-listed stocks as well) rose 0.3 per cent in the month and is up 9.9 per cent over the year.

The Australian All Ordinaries Index has risen 1.4 per cent over the month and is up 6.1 per cent over the year. America’s S&P 500 had a monthly rise of 1.4 per cent and is up 16.4 per cent over the year to date.

The Kina was down 0.2 per cent over the month against the US dollar and is down 1.1 per cent in the year to date. The currency was up 1 per cent against the Australian dollar, according to Kina. This year the kina is down 6.1 per cent against the A$ and 5.7 per cent against the yen.

Half-year Treasury Bills are 4.73 per cent, while full-year Bills are 8.03 per cent.