Oil rises on surging demand in China
Oil prices rose on Friday on signs of surging demand in China, the world’s No. 2 oil consumer, although prices were headed for a second weekly decline on swelling US inventories and concern that trade wars were curbing economic activity.
Brent crude LCOc1 futures rose 49 cents to settle at $79.78 a barrel. West Texas Intermediate (WTI) crude CLc1 futures rose 47 cents to settle at $69.12 a barrel.
For the week, Brent fell 0.9 percent, while US crude lost 3.1 percent. Both contracts have fallen around $7 a barrel below four-year highs reached in early October.
WTI’s discount to Brent WTCLc1-LCOc1 widened to its most since June 8, hitting $11.00 a barrel.
Refinery throughput in China, the world’s largest oil importer, rose in September to a record 12.49 million barrels per day (bpd), government data showed.
The data fed hopes about oil demand in China, even though economic growth slowed in the third quarter to its weakest since the global financial crisis.
An OPEC and non-OPEC monitoring committee found that oil producers’ compliance with a supply-reduction agreement fell to 111 percent in September from 129 percent in August, three sources familiar with the matter said. The Organization of the Petroleum Exporting Countries has led cuts from major oil producers since 2017 to shore up prices.
Gold prices stay up
Gold prices edged up on Friday and were on course for a third straight week of gains, supported by robust technical momentum and a softer dollar.
Spot gold was up 0.1 percent to $1,225.75 an ounce in New York day close. US gold futures settled down $1.4, or 0.11 percent, at $1,228.7. The yellow metal was headed for a 0.7 percent rise this week.
A recent sell-off in global stocks had prompted investors to seek refuge in gold, pushing prices of the bullion to a 2-1/2-month high, at $1,233.26 earlier this week. However, equity markets recovered on Friday, capping gains in the bullion.
Gold, which is priced in dollars, is seen as a safe store of value during political and economic uncertainty.
In other precious metals, silver gained 0.3 percent to $14.60. Platinum rose 0.7 percent to $831.60 an ounce, but was on track to post a weekly decline of 0.6 percent. Palladium was up 0.9 percent at $1,080.25. The metal was set to post a weekly gain of 1.6 percent after falling for previous two weeks.
EU wheat slips with Chicago as export lull continues
European wheat futures fell on Wednesday to their lowest in almost two weeks, pressured by weakness in Chicago and a dearth of short-term export demand. December milling wheat on Paris-based Euronext was down 1.25 euros, or 0.6 percent, at 202.00 euros ($232.95) a tonne, close to a 201.75 euro session low that marked its weakest level since Oct. 4.
The contract was testing the bottom end of its recent range, having run up against chart resistance on Tuesday when it touched a six-week high of 205.50 euros. Chicago wheat, the global benchmark, was down about 1 percent in U.S. trading, encouraging Euronext to ease, though a weaker euro lent some support to Paris prices. Forecasts of lower global wheat supplies after a series of weather-damaged harvests worldwide, together with dry conditions for wheat sowing in western Europe, continued to underpin the market and keep it above the psychological 200 euro threshold.
NY cocoa may test resistance at $2,238
New York December cocoa may test a resistance at $2,238 per tonne, a break above which could lead to a gain to the next resistance at $2,299. These resistances are identified respectively as the 61.8 percent and the 76.4 percent retracements of the downtrend from $2,397 to $1,982. It is doubtful that cocoa could break $2,238, as this resistance itself would be strong enough to trigger a deep correction. Marking this barrier stronger is another similar one established by a falling trendline. Most likely, the contract could temporarily peak around $2,238. A break below $2,190 could cause a loss to $2,141.
Soybeans firm on fund-driven buying; wheat futures sag
US soybean futures firmed modestly on Wednesday on fund-driven buying and strength in allied soymeal futures, analysts said. Corn futures were little changed while wheat futures dipped on technical selling. As of 12:29 p.m. CDT (1729 GMT), Chicago Board of Trade (CBOT) November soybean futures were up 1-1/4 cents at $8.86 per bushel, hovering below a two-month high set Monday at $8.92. CBOT December corn was flat at $3.75-1/4 a bushel and December wheat was down 6-3/4 cents at $5.16-3/4 a bushel. Soybeans rose as funds covered short positions and added new longs, expecting a seasonal climb in prices. Corn futures were little changed, despite pressure from bearish weekly ethanol data. The US Energy Information Administration said weekly US output of corn-based ethanol fell to 1.01 million barrels per day, the lowest since April, while stocks of the biofuel rose to 24.13 million barrels.
EU milk production expected to climb in 2019
Given the sustained demand for EU dairy products, milk collections could grow by 0.9percent in the EU in 2019, a new short-term outlook from the European Commission has outlined.
In addition, in 2019, EU production of dairy products is expected to increase by 0.7percent, driven mainly by cheese (+1.5percent). Growth is also expected in cream and butter production (around +1percent) and for skimmed milk powder, but on a smaller scale (+0.3percent). In the case of liquid milk, production will probably continue to decline (-1percent). Furthermore, the report outlines demand for European dairy products is expected to remain strong, resulting in increased domestic use (+0.8percent) and exports (+4percent).
Palm oil may retrace into 2,214-2,228 ringgit range before rising
Palm oil may retrace into a range of 2,214-2,228 ringgit per tonne, before retesting a strong resistance at 2,251 ringgit.
The resistance is provided by the 100 percent projection level of an upward wave (c) from the Oct. 11 low of 2,153 ringgit. This barrier could have triggered a pullback towards a falling trendline and the neckline of a small inverted head-and-shoulders. In addition, the big gap formed between Oct. 15 and Oct. 16 may be totally or partially filled. A break above 2,251 ringgit could lead to a gain to 2,274 ringgit.