WORLD COMMODITIES TRADING
World oil tumbles 3pc
Oil prices fell 3% on Friday after US President Donald Trump again pressured the Organization of the Petroleum Exporting Countries to raise crude production to ease gasoline prices.
Traders said Trump’s comments, despite lacking specifics, were enough of a catalyst to spur investors to take profits after a long bull run that had pushed prices to six-month highs.
Brent crude futures settled at $72.15 a barrel, down $2.20, or 3 percent. West Texas Intermediate crude ended at $63.30 a barrel, down $1.91, or 2.9 percent. Brent was flat on the week after rallying for four weeks in a row. WTI saw a 1.2 percent weekly loss, breaking its six-week bull run.
Trump told reporters on Friday that he had called OPEC and told the cartel to lower crude prices, without identifying who he spoke to, or if he was speaking about previous discussions with OPEC officials. Since taking office, Trump has weighed in on OPEC on numerous occasions on Twitter, often exhorting the cartel to lower prices. His comments tend to have a temporary effect on the market.
On Thursday, Brent rose above $75 a barrel for the first time this year after Germany, Poland and Slovakia suspended imports of Russian crude via a major pipeline due to contamination. Russia said it plans to restore oil supplies via its key Druzhba pipeline to Europe in two weeks.
Crude futures have gained more than 30 percent this year after OPEC and several allies cut supply by 1.2 million barrels per day, and as sanctions on Venezuela and Iran have reduced output.
Traders also said Friday’s selloff was in part due to rumors that Washington could grant China an exemption allowing it to keep buying Iran’s oil, which would increase available worldwide supply.
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Gold scales near 2-week peak
Gold jumped to a near two-week high on Friday, as the dollar slipped on tepid US inflation data, outweighing an overall strong first-quarter growth report.
Spot gold gained 0.7 percent to $1,286.41 per ounce as of 2:16 p.m. EDT (1816 GMT), after hitting its highest level since April 16, at $1,288.59.
The metal, which on Tuesday touched its lowest level since late December, at $1,265.90, is up nearly 1 percent so far this week and is poised for its first weekly gain since March 22.
US gold futures settled 0.7 percent higher at $1,288.80 an ounce. While gold has fallen more than 4 percent from a peak in February, bullion’s recovery from this week’s four-month low is painting a neutral picture in technical charts.
Gold looks neutral in a $1,274-$1,284 range, and an escape could suggest a direction, said Reuters technical analyst Wang Tao.
Among other precious metals, silver rose 0.7 percent to $15.04 per ounce, while platinum was up 1.7 percent to $897.25. Palladium advanced 3 percent to $1,458.01 per ounce, its highest level since March 27.
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Global aluminium output remains static in q1
Global aluminium production remained static in the first quarter of this year, according to the International Aluminium Institute (IAI). A couple of long-running outages together with curtailments in Europe caused production outside China to dip 1.4 percent to 6.37 million tonnes in the first three months of 2019. Chinese production, a complex moving picture of price-induced curtailments, pollution controls and capacity swaps, edged 1.6 percent higher to 8.93 million tonnes. The net result was that global production rose by a marginal 0.3 percent year-on-year as China remained the world’s dominant player with a 57 percent share of world production.
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New crop wheat slips to fresh lows
New-crop wheat futures on Euronext fell to new life-of-contract lows on Wednesday as decent harvest prospects in the northern hemisphere maintained supply pressure. September milling wheat on the Paris-based Euronext exchange settled 1.50 euros, or 0.9 percent, down at 171.25 euros ($191.06) a tonne. That was below a previous low of 172 euros on Tuesday and also marked the weakest level for a second-month price on Euronext in almost a year.
Chicago wheat slipped to a six-week low as Tuesday’s slight bounce petered out. The focus on supply outweighed potential support for Western European wheat from further euro weakness against the dollar. A higher than expected official estimate for Canadian wheat sowings on Wednesday added to supply pressure created recently by favourable growing conditions for US and Russian wheat. Statistics Canada projected the country’s wheat area this year at 4 percent above last year’s level, exceeding the average trade expectation, with farmers set to shift away from canola amid a dispute with China over shipments of the oilseed.
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Copper rebounds on hopes for trade deal and Chinese growth
Copper and other base metals recovered on Wednesday from the previous day’s losses, buoyed by hopes for a US-China trade deal and stronger economic growth in top metals consumer China. The White House said that top US officials will travel to Beijing for trade talks next week, with one leading official expressing optimism about striking a deal.
Most industrial metals declined on Tuesday after comments by Chinese officials dampened hopes for more stimulus measures. Three-month copper on the London Metal Exchange added 0.6 percent to $6,448 a tonne in closing open-outcry activity, having shed 1.1 percent on Tuesday. Investors will look to China’s April purchasing managers index (PMI), due next week, for further evidence on China’s economy after a strong figure in March, said Argonaut Securities analyst Helen Lau.
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Sugar, coffee prices fall as Brazilian currency weakens
Raw sugar and arabica coffee futures were lower on Wednesday, depressed partly by the weakness of the currency of Brazil, the top producer of both commodities. A weaker Brazilian real boosts dollar-denominated prices in local currency terms and can encourage producer selling.
July raw sugar was down 0.07 cents, or 0.5 percent, to 12.83 cents per lb at 1343 GMT, as the market remained locked in a narrow trading band with solid support below 12.50 cents but heavy resistance above 13 cents. Dealers noted both ends of the range were tested last week and prices now appear to have drifted back towards the middle of the band. Recent strength in energy markets has increased the incentive to use Brazilian cane to make biofuel ethanol rather than sugar but there remains concern about high stocks, particularly in India and China. A survey of analysts conducted by S&P Global Platts saw a cane crush of 16.5 million tonnes, down 26 percent year-on-year and the lowest volume for the period since 2015/16. August white sugar was down $0.40, or 0.1 percent, at $337.80 a tonne.
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Shanghai industrial metals fall
Industrial metals in Shanghai decreased on Wednesday following declines in London overnight and amid fears that China may ease its economic stimulus.
The most active copper contract in Shanghai ended down 0.4 percent to 48,960 yuan ($7,282.25) a tonne, while aluminium fell 0.4 percent, nickel closed down 1 percent and zinc dropped 1.8 percent. In London, metals had won some support from progress in US-China trade talks, but gains were capped by a stronger U.S. dollar, which was steady on Wednesday after rising to a 22-month high overnight. A stronger dollar makes dollar-denominated metals more expensive for countries using other currencies to import.