Oil, Natural Gas, And Food Prices Are All Headed Higher

Normally, after stock-market price action like we saw yesterday, I’d lead with that. But all things considered, I’m going to begin instead with crude oil…

And how it rose another $4, or 3.46%, between Friday’s and Monday’s close. Moreover, it will likely move higher again today. Probably by several percentage points again.

For the record, I do realize the last time I made such a bold prediction (that time about stocks), I was ultimately proven excessively inaccurate. And who knows, that might be the case again today.

I would welcome being wrong here too. But with the news being what it’s been and continues to be…

Well, I rest my case until proven otherwise.

Reports (or rumors?) are out this morning that the Biden administration will cut the country off from Russian oil after all. So any news (or non-news) on that will continue to affect oil prices.

So will U.S. officials’ in-person discussions with Venezuela about easing U.S. sanctions against its oil imports. And Axios reported yesterday that the White House could also be considering a trip to Saudi Arabia for the same reasons – with this admitted caveat from the White House:

A White House spokesperson told Axios: “We don’t have any international travel to announce at this time, and a lot of this is premature speculation.”

What is a stated fact, however, are these details from Fox Business:

Brazil is searching for new fertilizer suppliers as the war in Ukraine threatens to cut off shipments to one of the world’s breadbaskets, with potential ripple effects on already high global food inflation.

Why? Because “the Russian trade ministry has called for a broad suspension of fertilizer exports, state news agency TASS reported Friday.” And Brazil is an enormous global supplier of such things as coffee, soybeans, and sugar…

More Non-REIT News to Know About

There’s an oil component to that story too. Or rather an intense energy link since:

Before the Ukraine conflict, farmers across the world were struggling to buy enough fertilizers, some of which more than doubled in price last year. Higher natural-gas prices hampered production of the ammonia needed for nitrogen fertilizers, while power outages at Chinese fertilizer plants and Hurricane Ida in the U.S. curtailed global production.

So the ongoing war just adds “fuel” to an already raging fire. Very convoluted fuel at that.

Yahoo Finance’s Morning Brief explains that Wall Street’s “over-arching mood” is “one of outright confusion.” And Editor-at-Large Brian Sozzi adds:

I had one trader tell me he has been shorting oil in recent sessions, which by his own admission hasn’t worked well as prices have surged to nearly $120 a barrel (and maybe soon, $150).

Another person remarked… they are still long bank stocks on expectations of higher yields and rising interest rates. Banks have been crushed (KBW bank ETD down 5%; JPMorgan down 9%) post Russia’s invasion of Ukraine as those in the know reason the financial system will soon… be stressed due to the West’s sanctions on Russia.

Do you know what else is down these days? And by “these days” I mean the last six months?

That would be Meta Platforms/Facebook (FB). It slid another $12.59 yesterday, or 6.29% to $187.47 – a multi-year low. That obviously contributed to the Nasdaq formally entering a bear market, now down 20%+ from its record high mere months ago.

Speaking of which, yesterday’s major index included the:

  • S&P 500 falling 127.78 points (2.95%)
  • Dow falling 797.42 points (2.37%)
  • Nasdaq falling 482.48 points (3.62%
  • Russell 2000 fell 49.57 points (2.48%).

Meanwhile, gold rose $33.50, or 1.70%.

The World According to REITs

Here’s a bit of good news I can give as we move toward real estate investment trust (REIT) specific reporting…

Yesterday, we heard The Batman movie earned $128.5 million at the box office, making it another post-Covid success story. In fact, it’s a success story by even pre-Covid metrics, since this makes for the fifth-largest March opening ever.

It’s further proof that people really are getting into the swing of the “old normal” again. It isn’t just a craving at this point. It’s a trend that I look forward to continue capitalizing on through REITs.

Speaking of such:

  • Gladstone Commercial (GOOD) renewed and expanded its contract with Bosch Security Systems at a Minneapolis-area, Minnesota, office property. The new agreement covers 73,960 square feet of space through July 31, 2028. The company also renewed a lease in the same building for 5,630 square feet through January 31, 2024.
  • Realty Income (O) saw Moody’s affirm its existing ratings, including its A3 senior unsecured assessment. Its outlook is stable.
  • Park Hotels & Resorts (PK) saw Moody’s affirm Park Intermedia Holdings’ B1 corporate family and senior secured ratings. The agency also revised its outlook from negative to stable.

Stable sounds pretty good these days considering everything. And when you have a full list of REITs that actually went up in price despite most everything else tanking?

Well, it’s hardly the only thing we want to be paying attention to. But it still is at least a nice sight for potentially sore eyes.

(Click on image to enlarge)

(Source: The Daily REITBeat)

Brad Thomas is the Editor of the Forbes Real Estate Investor.

Disclaimer: This article is intended to provide information to interested parties. As ...

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