Oil and gas have performed strongly, and there is also an upward trend in metals prices. Business Advantage PNG’s monthly review of Papua New Guinea commodity and financial markets.

Independent oil and gas producer Santos. Credit: Santos

According to Kina Securities, West Texas Intermediate rose by 3.2 per cent over the month and is up 22.9 per cent for the year to date.

In the opinion of energy economist Carole Nakhle, the creation of shale oil has changed the pricing of the commodity.

‘With traditional oil, if you take an investment decision today you have to wait maybe 10 years for oil to come out of the ground, whereas with shale, it’s a matter of months. This put a ceiling on oil prices.’ There are growing indications that the US shale industry is in trouble at current price levels, however.

‘Agriculture prices were stronger. Palm oil rose by 11 per cent for the month and is down 15.2 per cent for the year.’

Meanwhile, LNG prices surged over the month, jumping 11.2 per cent. The price is only recovering from previous losses, however. It is down 29.7 per cent this year.

Gold prices from January 2018 to October 2019. Credit: Trading Economics

Precious metals

Gold continues to be strong. It is trading at US$1,495.10 an ounce, which is a rise of 1.6 per cent for the month. It is up 16.7 per cent in 2019.

The silver price was stronger again. It was up 5.2 per cent over the month and has risen this year by 1.5 per cent.

Copper is also strong. It was up by 4 per cent over the month. The price is up 2 per cent for the year.

Agriculture

Agriculture prices were stronger in the period. Palm oil rose by 11 per cent for the month but is still down 15.2 per cent for the year.

The cocoa price went sideways, rising 0.9 per cent over the month. The price is up 1.9 per cent in 2019.

Coffee prices were slightly weaker. They were down by 0.6 per cent over the month and are 1.3 per cent lower for the year to date.

Changes in palm oil price from November 2018 to October 2019. Credit: Trading Economics

Equities

PNG equities were slightly up. The KSI Home Index (PNG-listed stocks only) rose by 0.7 per cent over the month and is up 13.5 per cent for the year, reports Kina. The KSI Index (which includes dual-listed stocks as well) was up 1.7 per cent for the month and is up 33 per cent over the year. We await PNGX’s new indices for the exchange, due to launch next month.

The Australian All Ordinaries Index performed similarly, rising by 0.6 per cent over the month, while America’s S&P 500 was up by 2.1 per cent.

The Kina mostly held its ground, but fell by 4.1 per cent against the British pound.

Half-year Treasury Bills are unchanged at 4.7 per cent, while full-year Bills are 7.03 per cent. Inscribed stock for 2018–2021 has an interest yield of 7.9 per cent.