If there’s one commodity that has started the decade well, it’s oil. Brent oil has gained 5.2 per cent this week and crude oil has gained 4.2 per cent.

In contrast, some of the top performing commodities of 2019 have been slower. Copper has dropped 0.82 per cent, iron ore has gained 2.75 per cent and gold is up 3.79 per cent.

There’s no question increased hostilities between the US and Iran are the major catalyst for rising oil prices. Last week America assassinated Qasem Soleimani, a high-ranking general in the Iranian army.

Iran’s Supreme Leader has called for “forceful revenge” against the United States.

Any conflict could affect the petroleum industry — particularly attacks on pipelines and tankers, as similar conflicts such as the first Gulf War and the Iranian Revolution did.

But analysts believe an oil run would only sustain for a long period if the situation escalated into war — a scenario they think is unlikely to occur.

 

It won’t help Trump’s re-election

While many political commentators have suggested President Trump’s desire for re-election could lead to armed conflict, Washington-based energy analyst Katie Bays, from Sandhill Strategy, said on Friday this desire would actually go against this.

“While warfare may shore up public sentiment towards the President, surging energy costs almost certainly will weaken the US and global economies,” she said.

“Similarly, another military engagement in the Middle East is likely repellant to US voters.

“So, despite near term angst, the marginal barrel of oil likely will continue to come from the US, and as such will not command a long-term geopolitical risk premium.”

Bays set 4 million barrels per day as the supply level that would have to be disrupted, but said it was more likely the appreciation in oil price would wane similarly to the way it did following the attack on Saudi Arabia’s Abqaiq facility last September.

 

Gold is more likely to gain

Bloomberg Intelligence analyst Mike McGlone also thinks oil’s rise will be tempered. But he also argued US-Iran tensions supported gold more than crude oil.

Gold has risen as well, but he argued that compared to oil, the supply-demand balance was more healthy.

While both commodities often rise in times of conflict, gold is perceived as a safe haven while oil generally rises because of expected supply or demand impacts.

“The market’s initial reaction to the US airstrike killing of one of Iran’s most powerful generals should fade, but is another catalyst to a more enduring boost to gold than crude oil,” McGlone said.

“OPEC is fighting a losing battle to offset non-OPEC supply and slack demand, in our view. Central-bank buying and exchange-traded-fund inflows are good indicators of gold’s favourable demand versus supply balance.”

He noted gold ETF holdings had risen 1.4 per cent so far this month.

McGlone argued that for gold to not hit $US1,600 ($2,303) by February, history would have to be defied. This is because January is usually a solid month for gold.

“Gold hasn’t had a bad January since 2013 – the metal will approach [US]$1,600 by February if it matches the 5.2 per cent average January increase of the last five years.”

 

Gold explorers outdoing the oil explorers

While individual small caps are more affected by project developments, commodity prices can have an impact.

For instance, when gold cracked $2,000 last year, over 60 gold small caps gained.

Today, on the first trading day since the assassination, 38 gold stocks were in the green — three times as many as the number of oil stocks that rose today.

Code Name Price % Chg Volume
A1G African Gold Ltd 0.17 +0.00% 10.0k
ALY Alchemy Resources Ltd 0.012 +9.09% 300.0k
AQI Alicanto Minerals Ltd 0.043 +0.00% 3.3k
ALK Alkane Resources Ltd 0.62 +2.38% 2.9M
AGS Alliance Resources Ltd 0.105 +0.00% 6.8k
AYR Alloy Resources Ltd 0.002 +0.00% 2.5M
ARS ALT Resources Ltd 0.022 +5.00% 4.1M
AME Alto Metals Ltd 0.039 +0.00% 136.2k
ANL Amani Gold Ltd 0.003 +0.00% 16.1M
ADN Andromeda Metals Ltd 0.046 -2.22% 6.5M
AAR Anglo Australian Resources NL 0.096 -1.08% 458.9k
AWV Anova Metals Ltd 0.009 +0.00% 1.6M
AOP Apollo Consolidated Ltd 0.265 +19.57% 511.0k
ARL Ardea Resources Ltd 0.56 +1.87% 61.2k
ARE Argonaut Resources NL 0.005 +0.00% 622.4k
AAJ Aruma Resources Ltd 0.0025 +0.00% 750.0k
ARM Aurora Minerals Ltd 0.01 +0.00% 50.0k
AUC Ausgold Ltd 0.014 +7.69% 2.4M
AUT Auteco Minerals Ltd 0.009 +0.00% 400.0k
AVW Avira Resources Ltd 0.002 +0.00% 120.0k
AZM Azumah Resources Ltd 0.033 +3.03% 1.2M
BDC Bardoc Gold Ltd 0.084 +1.19% 3.2M
BAR Barra Resources Ltd 0.022 +4.55% 15.3k
BSR Bassari Resources Ltd 0.015 +0.00% 1.1M
BBX BBX Minerals Ltd 0.14 +0.00% 195.2k
BCN Beacon Minerals Ltd 0.039 +2.56% 3.1M
BGL Bellevue Gold Ltd 0.565 +0.00% 1.8M
BC8 Black Cat Syndicate Ltd 0.37 +5.88% 74.8k
BLK Blackham Resources Ltd 0.0135 +0.00% 6.0M
BSX Blackstone Minerals Ltd 0.17 -5.88% 1.0M
BRB Breaker Resources NL 0.305 +5.26% 381.2k
BNR Bulletin Resources Ltd 0.025 +0.00% 76.4k
CAI Calidus Resources Ltd 0.26 +2.00% 302.2k
CAY Canyon Resources Ltd 0.16 +1.56% 287.6k
CDV Cardinal Resources Ltd 0.35 +1.47% 370.0k
CDT Castle Minerals Ltd 0.009 +0.00% 506.8k
CYL Catalyst Metals Ltd 3.07 +8.77% 16.8k
CHN Chalice Gold Mines Ltd 0.26 +3.85% 950.3k
CTO Citigold Corp Ltd 0.005 +0.00% 572.8k
CM1 Coolgardie Minerals Ltd 0.05 +0.00% 200.0k
CGN Crater Gold Mining Ltd 0.012 +0.00% 294.9k
CY5 Cygnus Gold Ltd 0.038 +0.00% 63.7k
CYM Cyprium Metals Ltd 0.24 +0.00% 50.9k
DAU Dampier Gold Ltd 0.015 +0.00% 419.5k
DHR Dark Horse Resources Ltd 0.003 +0.00% 400.0k
DTM Dart Mining NL 0.09 +0.00% 15.0k
DTR Dateline Resources Ltd 0.003 +0.00% 2.7M
DEG De Grey Mining Ltd 0.0535 +0.00% 751.8k
DGO DGO Gold Ltd 0.95 +0.00% 665
DGR DGR Global Ltd 0.078 +2.56% 10.0k
DMG Dragon Mountain Gold Ltd 0.02 +0.00% 102.7k
E2M E2 Metals Ltd 0.18 +0.00% 17.4k
EMR Emerald Resources NL 0.041 +3.80% 1.1M
ERM Emmerson Resources Ltd 0.12 +0.00% 32.1k
FEL Fe Ltd 0.018 -6.25% 2.2M
FML Focus Minerals Ltd 0.24 +6.52% 136.5k
4CE Force Commodities Ltd 0.013 -15.38% 2.8M
GCY Gascoyne Resources Ltd 0.04 +0.00% 2.2M
GML Gateway Mining Ltd 0.016 -5.88% 321.5k
GBZ GBM Resources Ltd 0.037 +0.00% 92.5k
GME GME Resources Ltd 0.052 +0.00% 13.0k
GMN Gold Mountain Ltd/Australia 0.08 +0.00% 320.6k
GCR Golden Cross Resources Ltd 0.02 +0.00% 140.0k
GED Golden Deeps Ltd 0.024 +0.00% 50.0k
GMR Golden Rim Resources Ltd 0.012 +20.00% 800.0k
GBR Great Boulder Resources Ltd 0.038 +0.00% 50.0k
GUL Gullewa Ltd 0.028 +0.00% 100.0k
GWR GWR Group Ltd 0.088 -7.95% 31.2k
HMX Hammer Metals Ltd 0.022 +0.00% 676.2k
HHM Hampton Hill Mining NL 0.02 +0.00% 12.3k
HAW Hawthorn Resources Ltd 0.08 +0.00% 230.0k
HRN Horizon Gold Ltd 0.21 +0.00% 2.1k
HRZ Horizon Minerals Ltd 0.085 +3.66% 215.2k
KGM KalNorth Gold Mines Ltd 0.006 +20.00% 83.0k
KCN Kingsgate Consolidated Ltd 0.425 +1.20% 133.8k
KRM Kingsrose Mining Ltd 0.028 -9.68% 27.0k
KWR Kingwest Resources Ltd 0.17 +8.82% 42.0k
KTA Krakatoa Resources Ltd 0.038 -7.89% 245.2k
LNY Laneway Resources Ltd 0.007 +0.00% 810.0k
LTR Liontown Resources Ltd 0.087 -3.33% 2.0M
MKG Mako Gold Ltd 0.07 +0.00% 80.0k
MLL Mali Lithium Ltd 0.002 +0.00% 357.6k
MSR Manas Resources Ltd 0.12 +0.00% 500.0k
MAT Matsa Resources Ltd 0.9 +0.00% 31.9k
MML Medusa Mining Ltd 0.0015 +1.71% 312.8k
MLS Metals Australia Ltd 0.0045 +0.00% 3.2M
MDI Middle Island Resources Ltd 0.0045 +0.00% 500.0k
MOY Millennium Minerals Ltd 0.05 +0.00% 976.7k
MOH Moho Resources NL 0.05 +11.11% 10.0k
NAG Nagambie Resources Ltd 0.04 +0.00% 35.8k
NES Nelson Resources Ltd 0.06 +0.00% 6.8k
NWF Newfield Resources Ltd 0.19 +0.00% 7.5k
NXM Nexus Minerals Ltd 0.046 +0.00% 50.0k
NUS Nusantara Resources Ltd 0.325 -1.54% 90.0k
ODM Odin Metals Ltd 0.097 +0.00% 20.0k
OKR Okapi Resources Ltd 0.096 +0.00% 21.2k
OKU Oklo Resources Ltd 0.175 +9.38% 1.1M
ORN Orion Minerals Ltd 0.023 +0.00% 149.3k
ONX Orminex Ltd 0.08 +0.00% 130.2k
OVL Oro Verde Ltd 0.009 +0.00% 203.6k
PGI PanTerra Gold Ltd 0.042 -7.14% 289.0k
PM8 Pensana Metals Ltd 0.175 -5.71% 32.0k
PEC Perpetual Resources Ltd 0.047 +0.00% 44.0k
PRU Perseus Mining Ltd 1.1425 -1.09% 7.8M
PLL Piedmont Lithium Ltd 0.115 -4.17% 1.0M
PDI Predictive Discovery Ltd 0.01 +0.00% 7.0M
PRX Prodigy Gold NL 0.07 +0.00% 254.5k
PUA Pure Alumina Ltd 0.016 +0.00% 10.8k
RMS Ramelius Resources Ltd 1.335 +3.64% 2.8M
RND Rand Mining Ltd 2.47 +0.82% 2.5k
RED Red 5 Ltd 0.355 +4.35% 7.2M
RGL Riversgold Ltd 0.009 +0.00% 500.0k
SFM Santa Fe Minerals Ltd 0.07 +0.00% 22.7k
SMI Santana Minerals Ltd 0.004 +0.00% 18.6M
STN Saturn Metals Ltd 0.305 +3.28% 33.5k
SIH Sihayo Gold Ltd 0.018 +0.00% 255.5k
SLR Silver Lake Resources Ltd 1.385 -0.71% 7.1M
SAU Southern Gold Ltd 0.2 +27.27% 10.0k
SHK Stone Resources Australia Ltd 0.002 +0.00% 715.0k
SMC Strategic Minerals Corp NL 0.46 +0.00% 13.2k
TLG Talga Resources Ltd 0.46 -3.23% 115.0k
TLM Talisman Mining Ltd 0.091 +3.30% 459.3k
TAM Tanami Gold NL 0.042 +0.00% 130.6k
TAR Taruga Minerals Ltd 0.011 +9.09% 24.5k
TMX Terrain Minerals Ltd 0.004 +0.00% 3.0M
TIE Tietto Minerals Ltd 0.29 -3.45% 330.0k
TTM Titan Minerals Ltd 0.175 +0.00% 405.0k
TNR Torian Resources Ltd 0.008 +0.00% 720.6k
TBR Tribune Resources Ltd 5.4 +0.00% 23.7k
TRY Troy Resources Ltd 0.1 +5.26% 1.6M
VAN Vango Mining Ltd 0.165 +0.00% 396.7k
VEC Vector Resources Ltd 0.01 +0.00% 26.9M
VKA Viking Mines Ltd 0.013 +0.00% 43.5k
WAF West African Resources Ltd 0.47 +0.00% 2.5M
WWI West Wits Mining Ltd 0.013 +18.18% 36.6M
WGX Westgold Resources Ltd 2.34 +1.92% 618.4k

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