Ahead of the final trading session of 2023, the ASX is readying to open on a weak note — the SPI futures were trading 33 points or 0.4% at 7,574 near 9am AEDT.
This followed mixed trade on Wall Street overnight — tech stocks pulled the Nasdaq down 0.03%, while the Dow added 0.1% and the S&P 500 was up 0.04%.
Early gains in the S&P 500 were pared in afternoon trade after the index came within 4 points of its record high. Tonight will tell whether we see a new all time high in 2023, which would mark the first all-time high in nearly two years after the index climbed by more than 24% this year.
While it’s pointing to be a weak local day of trade, it’s been a positive week — despite low trading volumes — with the benchmark ASX 200 Index gaining 1.5% over the past two trading days to sit on a 8.17% gain for the year.
Meanwhile, the ASX Small Ordinaries index is also in the green for the year but has underperformed the broader market with a return to date of just 5.21%.
Oil price slips
Commodities also edged lower overnight with iron ore, oil and gold each ending the session lower. Iron ore lost 1.8% to US$138.70 per tonne, spot gold is now priced at US$2,072.25 per ounce, while Brent crude dropped 1.4% to US$78.50 per barrel.
West Texas Intermediate (WTI) fell by 3.2% to close below US$72 per barrel, down notably from its peak earlier this week, which was the highest since November.
This decline in the oil price marked the fourth fall in five sessions, as rising inventories at the key US storage hub in Cushing, Oklahoma, partly offset a drop in national stockpiles.
This shift came despite a large drop in US national crude stockpiles of 7.1 million barrels — the largest one-week fall since August. But inventories at the Cushing, Oklahoma storage hub remained consistent, at their highest levels since August. This mixed picture of demand, with national declines but steady levels at a key hub, has contributed to the oil market's recent volatility.
Looking ahead, a note from BOCI Global Commodities suggests that global oil demand growth could decline to 1.1 million barrels per day in 2024 in part because of improved fuel efficiency and higher penetration of renewables.
Global oil prices were highly volatile this year amid sustained production cuts by Saudi Arabia, Russia and other members of OPEC+. However, NRMA’s Peter Khoury says to expect higher petrol prices in 2024.
“Unfortunately there’s no sight of any kind of stability. All of the volatility that we took out of 2023 we’ll be entering 2024 with on our backs still,” said Khoury.
On the small cap front
The S&P ASX Small Ordinaries gained 0.69% yesterday, while the ASX 200 ended 0.70% higher.
You can read more about the following on Proactive throughout the day:
Imugene Ltd (ASX:IMU, OTC:IUGNF) has made several important advancements in 2023, bringing the company closer to its goal of “revolutionising” cancer treatment.
Blue Star Helium Ltd (ASX:BNL, OTC:BSNLF) has completed site works ahead of drilling at its high-grade Voyager helium project in Las Animas County, Colorado. The spudder rig is mobilising to site to set conductor after which the well will be ready for the main rig arrival.
AuKing Mining Ltd (ASX:AKN) continues to identify uranium mineralisation as part of its stage 1 exploration and drilling program at the Mkuju Uranium Project in southern Tanzania.
Arovella Therapeutics Ltd (ASX:ALA) has outlined its highlights from 2023 and provided a roadmap of where the company is headed over 2024 and some of the milestones that it is hoping to achieve.