OIL PRICES SOAR AFTER DROP IN US STOCKPILES
Crude oil prices rose on Thursday to extend gains from the previous session after official government data showed US stockpiles had eased from record highs.
Prices surged on Wednesday after a slew of market reports and official data offered some hope that a near three-year global glut in oil is coming to an end, albeit more slowly than many have anticipated. The market was also buoyed after the Federal Reserve raised interest rates in line with expectations but did not signal any pick-up in the pace of further rises.
US West Texas Intermediate (WTI) crude was up 39 cents, or 0.8 percent, at $49.25 a barrel in early trade, having surged 2.4 percent in the previous session while posting its first increase in eight days. Brent futures climbed 47 cents, or 0.9 percent, to $52.28. They had their first increase in seven days on Wednesday, gaining 1.7 percent.
SIGNIFICANT CHANGE IN EU MILK PRODUCTION LIKELY
Further expansion into EU milk production expected in 2017 and 2018, says a recent report by the European Commission. In 2017, it says milk collection is projected to be 0.6 percent above 2016. However, in the first quarter, it is expected to be below the high levels of 2016, particularly because there is one day less in February2017.
In spring, the Commission says EU milk collection should close the gap on last year and, if raw milk prices remain stable, a significant increase can be expected in the second half of 2017.
This change is expected to go hand in hand with a yield increase of 2 percent to 7065 kg/cow and a herd decline of 1.6 percent. The herd decline is projected to be greater in the Netherlands to comply with the phosphates legislation.
US GOLD PRICES STEADY
Gold prices held steady on Wednesday ahead of the outcome of a two-day Federal Reserve meeting, with the US central bank widely expected to raise interest rates. Spot gold had edged up 0.1 percent to $1,199.34 per ounce. US gold futures were down 0.3 percent at $1,199 per ounce. With a rate increase by the Fed seen as a done deal, investor focus is shifting to what message the central bank will deliver when it concludes its meeting on Wednesday.
In December the Fed forecast three rate rises this year. The statement from the Fed, on Wednesday will be followed by a briefing. Investors were also focusing on Wednesday´s Dutch elections, which have been boosting gold´s safe-haven appeal. The Party for Freedom is seen as having little chance of coming to power, but a strong election performance for the group that wants to de-Islamicize the Netherlands would fuel worries over a surprise result in French presidential elections in April and May.
NATURAL GAS FUTURES PUSHED HIGHER
US natural gas futures pushed higher on Wednesday, bouncing back from heavy losses in the prior session as forecasts showing cooler weather on the way boosted the heating fuel.
US natural gas for April delivery rose 3.8 cents, or around 1.3 percent to $2.976 per million British thermal units. Prices of the heating fuel sank 10.5 cents, or about 3.5 percent, on Tuesday.
Snow showers and gusty winds remain in the wake of Tuesday’s powerful winter storm that brought a wintry mess to the Mid-Atlantic and Northeast. Temperatures are expected to remain much colder than normal through the end of the week, with highs struggling to reach the 30s, while overnight lows drop into the teens to below 0F. A fast-moving weather system will then impact the east-central US Saturday into Sunday, followed by warming Monday, but again cooling off mid-week.
CHINA BULLS KICK IRON ORE RATE BACK ABOVE $90
Renewed optimism about the strength of Chinese demand saw iron ore and steel prices spike on Wednesday after statistics showed the economic rebound in the world’s top commodities consumer accelerating into 2017.
The Northern China import price of 62 percent Fe content ore rose 4.2 percent to trade at $92.1 per dry metric tone according to data supplied by The Steel Index after the world’s most traded steel futures contract – Shanghai rebar – jumped to the highest since February 2014. Volatile trading on the Dalian Commodities Exchange saw domestic iron ore price surge 5.5 percent to triple digits on Wednesday.
The Statistics Bureau of China said yesterday industrial production led by the construction industry jumped 6.3 percent in January and February of 2017. Fixed asset investment shot up by 8.9 percent compared to 8.1 percent for 2016 as a whole thanks to strong private sector investment.
‘MALAYSIA SUGAR RATE SHOULD HAVE BEEN REDUCED’
The DAP’s Tony Pua of Malaysia said retail sugar price in the country should have been reduced and not increased, based on global market raw sugar prices.
In a statement, Pua who is DAP national publicity secretary and MP for Petaling Jaya Utara, pointed out prior to 2015, Malaysia’s two sole sugar manufacturers purchased raw sugar via the government’s long term contracts (LTC) for imported raw sugar supply.
He said for 2009-2011, the fixed raw sugar price was US$17.50 per 100lbs, while for 2012-2014, the price per 100lbs was US$26.00. Pua said the LTC raw sugar purchasing system was subsequently abolished and manufacturers purchased their raw sugar supply directly, based on global market raw sugar prices. Pua said between January 2012 to December 2014, the manufacturer’s raw sugar supply price was US$26 per 100lbs.