OIL PRODUCTION VITAL FIGURES IN MARCH 2017
In February, OPEC remained largely compliant with the production cuts, with OPEC 12 production (ex-Gabon) down 1.11 Mbpd compared to October 16.
Oman has offered solid support with a production cut of 50,000 bpd from a production base. Russia + FSU has done little (yet), with a 50,000 bpd reduction. Russia + FSU were supposed to cut 300,000 bpd. Global total liquids remain up 20,000 bpd YOY. The oil price stepped down in March to $50/bbl, confronted with a continuing glut and growing uncertainty, but has since recovered to $55.
OPEC drilling remains close to a cyclical high, while US drilling continues to recover. Total US rigs were up 68 to 824 for the month to the end of March.
GOLD FALLS AFTER US JOBS STATISTICS, FED MINUTES LIMIT LOSSES
Gold fell from one-month highs on Wednesday after better-than-expected US jobs data boosted US bond yields and the dollar but losses were limited after minutes from the Federal Reserve’s March policy meeting were released.
Bullion pared some losses after the Fed’s minutes showed most policymakers think the central bank should take steps to begin trimming its $4.5 trillion balance sheet later this year as long as the economic data holds up.
Spot gold was down 0.3 percent at $1,251.74 an ounce in the New York last trading on Wednesday, while US gold futures ended the session 0.8 percent lower at $1,248.50 an ounce.
Earlier in the session, the ADP National Employment Report showed that US private employers added 263,000 jobs in March, beating economists’ forecasts of 187,000 additions.
NATURAL GAS RATE HIKE IN BARBADOS
Barbadian businesses and residents could soon be asked to pay more for natural gas. That signal is coming from Consumer Affairs Minister, Donville Inniss. He pointed out that consumers in Barbados have not had an upward movement in the price of natural gas at the commercial level in 10 years and at the residential level in 20 years. He said that Barbados continues to be heavily dependent on fossil fuel.
Last year, for example, this country imported 759 000 barrels of gasoline, 495 000 barrels of diesel and 1.2 million barrels of heavy fuel oil. The country forked out some $260.5 million to import those petroleum products, a price which Inniss said was based on the prevailing low international price for oil.
CBOT WHEAT FUTURES MOVE HIGHER
Wheat futures on the Chicago Board of Trade closed higher on Wednesday on light technical buying including short-covering.
CBOT May wheat futures settled 2-3/4 cents higher at $4.29 per bushel. Commodity funds continue to hold a large net short position in CBOT wheat futures, leaving the market open to bouts of short-covering. K.C. May HRW wheat settled up 3-1/4 cents at $4.25 a bushel while MGEX May spring wheat closed down 2-3/4 cents at $5.24.
Traders awaited the results of a wheat tender from Algeria’s state grains agency. It is projected US winter wheat production for the 2017-18 marketing year at 1.285 billion bushels.
BRAZIL’S CONAB POSTS HISTORIC COFFEE SELLING
Brazil’s crop supply agency Conab sold all 3,733 bags of arabica coffee from the government’s supply in an auction on Wednesday, zeroing out public stocks for the first time in at least ten years.
Conab said buyers paid a 5 percent premium on average for coffee beans as old as 15 years stored in government warehouses in Sao Paulo and Minas Gerais states.
The average price was 424 reais ($155) per 60-kg bag. Brazil’s government has a policy to intervene in agricultural markets. It buys coffee and other staples from farmers when prices for products fall below a pre-established threshold and later sell the products to the private sector at market prices.
HIGH MILK PRODUCTION IN PRINCE EDWARD ISLAND
Dairy farmers are producing more milk these days in Prince Edward Island because demand for butter is on the rise across North America. But other trends south of the border are causing farmers to be concerned.
At Wednesday’s annual meeting of Dairy Farmers of Prince Edward Island in Summerside, producers heard milk production in 2016 hit 109 million litres. That’s an increase of eight-and-a-half per cent compared to the year before. Producers also heard concerns about trade relations with the US under President Donald Trump.
Dairy farmers fear supply-management — Canada’s strict system of controls on pricing and production of milk — will come under attack.
MARCH SEES RETREAT IN URANIUM SPOT PRICES
Recently, there has been a lot of focus on the uranium spot market with prices regrouping early in 2017 after falling to $17.75 per lb in December 2016. It is said, in March demand interest from utilities looking for medium and longer term delivery contracts increased, but it failed to translate into increased interest in the spot market.
The spot uranium prices declined 7 percent over March with a total of 21 transactions taking place. While weakness was evident in March spot prices, since the start of the year they have climbed by 15 percent.