World oil hits highest since November 2014
Oil prices rose about 2 percent on Friday, with US crude hitting its highest in more than three years, as global supplies remained tight and the market awaited news from Washington on possible new US sanctions against Iran.
US light crude settled up $1.29 at $69.72 a barrel. It touched a session peak of $69.97 for the first time since November 2014. It was on track to gain just over 2.3 percent on the week.
Brent crude oil settled up $1.25 at $74.87 a barrel. The global benchmark was set to end the week up 0.3 percent.
Iran’s foreign minister said on Thursday that US demands to change its 2015 agreement with world powers were unacceptable. Trump has said European allies must rectify “terrible flaws” in the international accord by May 12. European powers want to hand Trump a plan to save the Iran nuclear deal next week. But they have also started work on protecting EU-Iranian business ties if Trump makes good on his threat to withdraw.
Iran resumed its role as a major oil exporter in January 2016 when international sanctions were lifted in return for curbs on Tehran’s nuclear program.
ANZ analysts Daniel Hynes and Soni Kumari said Brent could reach $80 a barrel by the end of this year, attributing recent strength to rising geopolitical risks and tighter global supply.
Surging production in the Permian shale basin is outpacing pipeline capacity, while local refining issues have exacerbated oversupply.
The United States now produces more crude oil than top exporter Saudi Arabia, and two weeks of US inventory builds have limited the oil market’s upside. US energy companies added oil rigs for a fifth straight week, with higher crude prices boosting profits and pushing nationwide production to record highs
Gold prices slightly higher
Gold prices rose slightly on Friday as the US dollar backed off its highs, initially rising after US jobs data was weaker than expected. However the data was still strong enough to support the case for more interest rate increases.
Spot gold rose 0.2 percent to $1,314.23 per ounce by 3:09 p.m. EDT (1909 GMT), heading for a third consecutive weekly decline, while US gold futures for June delivery settled up $2, or 0.2 percent, at $1,314.70.
The dollar index backed off its highs, but it still remained in positive territory against a currency basket. Investors earlier bet that the Federal Reserve will continue raising rates while other central banks will act more slowly.
The US employment data showed US job growth increased less than expected in April and the unemployment rate dropped to near a 17-1/2 year low of 3.9 percent.
Meanwhile, spot silver rose 0.6 percent to $16.50 an ounce, ending the week barely changed. Platinum gained 0.9 percent at $908 an ounce and was on track for a third weekly fall to end the week about 0.3 percent lower. Palladium rose 0.2 percent at $963.72 per ounce, heading for a nearly 1 percent weekly drop.
Soybean futures fall with export demand; wheat mixed
US soybean futures fell on Wednesday on concerns about decreased export demand from China as well as rising expectations for a bumper crop in Brazil, traders said. Wheat futures were mixed. Soft red winter wheat offerings held steady near a nine-month top after a rally on Tuesday, while hard red winter wheat contracts rose due to worries about the drought-stressed crop in the U.S. Plains. Corn futures were close to unchanged, underpinned by the slow start to planting in the U.S. Midwest. The United States is sending a top-level trade delegation to China this week, but the market was discounting hopes of an agreement between the two countries. At 10:34 a.m. CDT (1534 GMT), Chicago Board of Trade July soybean futures were down 4-1/2 cents at $10.48-3/4 a bushel.
Copper, nickel bounce off lows
Copper and nickel bounced off multi-week lows on Wednesday as Chinese steel prices soared, a dollar rally paused and a private survey showed growth in China’s manufacturing sector unexpectedly picked up in April.
The Caixin/Markit Manufacturing Purchasing Managers’ index (PMI) climbed to 51.1, from a four-month low of 51.0 in March, and topped economists’ forecast for a modest slowdown to 50.9. But the same survey showed a sub-index on export orders shrinking for the first time since November 2016. An official PMI survey on Monday also showed slower shipment orders last month.
Three-month copper on the London Metal Exchange was last bid up 1.1 percent in official midday rings at $6,818 per tonne, after hitting $6,710 on Tuesday, its weakest since April 4. Nickel was last bid up 2.2 percent at $13,960, after hitting its lowest since April 12 on Tuesday.
Ethiopia to buy 35,000 tonnes of wheat
The Ethiopian government has issued an another international tender to purchase 35,000 tonnes of milling wheat from optional origins, European traders said.
Finance for the tender, which closes on May 17, is being provided by the World Bank’s International Development Association (IDA) and other aid agencies, the traders said. This is separate from another tender for 400,000 tonnes of wheat from Ethiopia which closes on May 18. Ethiopia has not made purchases in two previous tenders for 400,000 tonnes of wheat despite a large import requirement.
Malaysian palm oil pares gains
Malaysian palm oil futures rose on the back of a weaker ringgit in its early session on Wednesday, but pared gains in the second half of trade as strength in related edible oils eased.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was up 0.04 percent at 2,363 ringgit ($600.81) a tonne at the close of trade, its first gain in seven days. Trading volumes stood at 30,072 lots of 25 tonnes each on Wednesday evening. The ringgit weakened on Wednesday to its lowest level against the dollar since Feb. 14, and was last down 0.3 percent at 3.9330. It has steadily declined over the past month, and has lost 1.8 percent of its value since the start of April. Palm had fallen to a two-week low in its previous session, and was down 1.3 percent last week as traders turned bearish over weak export demand. Malaysian palm oil product exports fell 5.7 percent for the full month of April versus March, inspection company AmSpec Agri Malaysia reported.
New York sugar slumps on India subsidy plan
Sugar futures on ICE weakened on Wednesday after India approved a subsidy that could potentially pave the way for exports to the world market, while London cocoa rose to a new 17-month high. August white sugar was down $7.50, or 2.30 percent, at $317.90 a tonne by 1130 GMT, after falling to a session low of $315.40. India’s cabinet on Wednesday approved a proposal to help sugar mills by paying cane farmers a subsidy for every tonne of cane they sell to them, a government source quoted as saying last week.
China sells 276,080 tonnes of rice at auction
China sells 276,080 tonnes of rice at auction of state reserves at average price of 2,291 yuan ($360.31) per tonne, the National Grain Trade Center said on Wednesday. The sale volume represents 11.64 percent of the total rice available at the auction.