Oil hits $80 as markets begin to price in tighter supply and geopolitical concerns. Food inflation shock is on the way as Corn, Rice and Wheat futures are all bid (supported) above May 2021 highs.
As noted in these two posts: chiasmusmagazine.blogspot.com/2023/07/inflation-shock-corn-wheat-and-oil.html and chiasmusmagazine.blogspot.com/2023/07/oil-price-trading-above-price-support.html an inflation shock is on the way lead by food and of course the oil price. Please refer to the chart 1, showing oil now breaking through its $80 price resistance. Chart 2, excuse the messy chart, shows oil now on par with April 2023 highs, five months after the 2020 Russian oil caps in November 2022.
Chart 3, shows Wheat (orange line), *Rice (white line) and Corn (blue line) futures. As you can see, both Corn and Rice, from their recent highs, have started to sell off, yet it is Wheat that remains bid. All food commodities are still supported above their May 2021 highs. Which is telling that food and energy inflation have yet to abate.
* We may see a return to 2020 highs (rice) when Rice exports were caught up in the supply chain shock re: global pandemic. This could occur again if countries begin to follow India's lead in banning exports to supply to their own markets, if crop failures and El Nino/Climate Change effect food markets.
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