World oil prices hit over one-year low
Oil prices slumped up to nearly 8 percent to the lowest in more than a year on Friday, posting the seventh consecutive weekly loss, amid intensifying fears of a supply glut even as major producers consider cutting output.
Oil supply, led by US producers, is growing faster than demand and to prevent a build-up of unused fuel such as the one that emerged in 2015, the Organization of the Petroleum Exporting Countries is expected to start trimming output after a meeting on Dec. 6. But this has done little so far to prop up prices, which have dropped more than 20 percent so far in November, in a seven-week streak of losses. Prices were on course for their biggest one-month decline since late 2014.
A trade war between the world’s two biggest economies and oil consumers, the United States and China, has weighed upon the market.
Brent crude futures settled down $3.80 a barrel, or 6.1 percent at $58.80. During the session, the benchmark dropped to $58.41, the lowest since October 2017. US West Texas Intermediate crude (WTI) lost $4.21, or 7.7 percent, to trade at $50.42, also the weakest since October 2017. In post-settlement trade, the contract continued to fall. For the week, Brent fell 11.3 percent and WTI posted a 10.8 percent decline, the largest one-week drop since January 2016.
Gold prices decline
Gold prices slipped on Friday as investors banked on the safety of the dollar over worries about a slowdown in the global economy, exacerbated by a sharp decline in oil prices.
Spot gold fell 0.32 percent to $1,222.74 per ounce in the New Trade on Friday and US gold futures for December delivery were down 0.39 percent to $1,223.10 per ounce.
Gold, a traditional safe store of value during times of political and economic uncertainty, has lost out to the dollar this year, with the metal having fallen more than 10 percent from a peak in April against the backdrop of a U.S.-China trade tussle.
Amongst other metals, platinum fell 0.39 percent, to $840.40 per ounce, while palladium slid 2.53 percent to $1,123.80 per ounce. Meanwhile, silver fell 1.45 percent to $14.27 per ounce.
Malaysian palm inches lower
Malaysian palm oil futures fell marginally on Thursday as concerns over high inventory levels overshadowed optimism linked to a crude oil price rally. The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange was down 0.2 percent at 2,002 ringgit ($477.80) per tonne in the first-half session of trading. Trading volumes stood at 16,228 lots of 25 tonnes each at the midday break. The recovery in oil prices led gains in palm but that was quickly pared back due to higher inventory concern, a Kuala Lumpur-based trader said.
Palm oil prices are influenced by movements in crude oil, as the edible oil is used as feedstock to make biodiesel. Stocks in Indonesia and Malaysia – top producers of the tropical oil – are expected to rise for the next two months, as demand from key buyers typically slows because palm oil solidifies in winter months. A break below the support at $1,967 ringgit could confirm the move into a price band formed by a lower channel, while a break above 2,016 ringgit may lead to a gain to 2,060 ringgit. In other related edible oils, the Dalian Commodity Exchange, the January soybean oil contract rose as much as 0.2 percent, but the January palm oil contract was unchanged.
London copper snaps 5-day rally
London copper prices snapped a five-session winning streak on Tuesday as investors practiced caution amid mounting trade friction between the United States and China. While both US President Donald Trump and Chinese President Xi Jinping expressed optimism about resolving their trade war ahead of a planned meeting at the G20 conference in Argentina at the end of next week, relations have since faltered again.
Leaders attending the Asia Pacific Economic Cooperation summit at the weekend in Papua New Guinea failed to agree to a joint communique for the first time in history, amid deep divisions between Washington and Beijing.
Three-month copper on the London Metal Exchange was down 0.5 percent at $6,225 a tonne, as of 0723 GMT. The most-traded copper contract on the Shanghai Futures Exchange ended down 0.2 percent at 49,580 yuan ($7,143.89) a tonne. Most other base metals on the Shanghai exchange fell, while London aluminium, nickel and zinc edged up.
LME aluminium neutral in $1,934-$1,964 range
LME aluminium looks neutral in a range of $1,934-$1,964, and an escape could suggest a direction. The range is formed by 50 percent and the 38.2 projection levels of a wave C from $2,059.
A break above $1,950.50 could open the way towards $2,000. The metal has been consolidating around $1,934 for more than a week, reluctant to fall through this level. This behaviour makes a further bounce likely. However, wave pattern sends a conflicting signal. The wave C looks incomplete. It may eventually travel into a zone of $1,809.50-$1,868. Signals will become clearer when the metal leaves the range.
October milk production rises 1percent year over year
Milk production in the 23 major states during October totaled 16.9 billion lb., up 1.0percent from October 2017, according to the U.S. Department of Agriculture’s latest “Milk Production” report. USDA also revised September production to 16.4 billion lb., a 1.5percent increase from September 2017. The September revision represented a decrease of 2 million lb., or less than 0.1percent, from last month’s preliminary production estimate, USDA said. USDA reported production per cow in the 23 major states at 1,934 lb. for October, 20 lb. above October 2017 and the highest production per cow for the month of October since the 23-state series began in 2003. The number of milk cows on farms in the 23 major sates was 8.72 million head, 8,000 head less than October 2017 and 1,000 head less than September 2018. Total U.S. milk production during October totaled 17.9 billion lb., up 0.8percent from October 2017. Production per cow averaged 1,912 lb. for October, 21 lb. above October 2017. The number of milk cows on farms was 9.37 million head, 30,000 head less than October 2017 and 2,000 head less than September 2018.
Vietnam coffee prices fall further
Vietnam’s domestic coffee prices fell further tracking lower international prices and on rising supplies from an ongoing harvest, while Indonesian premiums widened due to depleted stocks. Farmers in the Central Highlands, Vietnam’s largest coffee growing area, sold coffee at 35,300 dong ($1.51) per kg, down from 36,200-36,300 dong a week earlier, traders said. The London January futures contract closed at $1,615 on Wednesday, down from $1,663 a week earlier. Traders estimate that farmers have harvested nearly 40 percent of the beans and the harvest will end late-December. Output of the 2018-19 crop year is estimated at 30 million 60-kg bags, similar to the previous crop year, the trader said. This is higher than an earlier forecast of 27 million bags. Coffee Network analyst Andrea Thompson said on Wednesday that there would be a global surplus for the season of around 11 million bags, putting Vietnam’s forecast at 31 million bags. In Indonesia, premiums for robusta beans in the province of Lampung in Sumatra rose to $50 for the January contract due to depleting stocks, from $30 last week, according to an exporter.
Shanghai rebar steel prices pick up after big drop the day before, smog alerts support
Prices of Chinese steel rebar clawed back some ground on Thursday after their worst performance in eight months the day before, supported by disruptions to output amid smog alerts in the nation’s top steelmaking region. The northern province of Hebei has issued second-level smog alerts to its 10 cities that take effect from Thursday, forcing heavy industry to implement emergency measures including cutting output and crimping the transportation of materials. Benchmark Shanghai rebar futures closed 1.3 percent higher to 3,729 yuan ($538.20) a tonne, after dropping as much as 5.6 percent in the previous session in their biggest daily percentage decline since March 23. They touched their lowest in four months on Wednesday. However, analysts warned that prices faced headwinds in the short-term. Average daily crude steel output at member mills of the Chinese Iron and Steel Association (CISA) reached 1.92 million tonnes between Nov. 1 and 10, up 0.6 percent from Oct. 20-31, data from the group showed. Steel inventory at mills also climbed over the same period, up 0.1 percent to 12.23 million tonnes, according to the CISA data. Meanwhile, spot steel trading volumes picked up on Wednesday from three-month lows, with traders resuming some purchases at low prices. According to data tracked by Mysteel consultancy, a total of 154,700 tonnes of construction steel products were traded on Wednesday, up 17.6 percent from Tuesday.
Cbot soybeans may test support at $8.69-1/4
CBOT soybean January contract may test a support at $8.69-1/4 per bushel, a break below which could cause a loss to $8.60-3/4. The support is provided by the 76.4 percent projection level of a presumed wave (c) from $8.97-1/2.
This wave seems to be travelling towards $8.52, a support established by the lower trendline of a rising wedge. It will be strategically safe to target $8.60-3/4 first, as the pattern from the Nov. 2 high of $9.00-3/4 looks like a flat, which is characterized by three component waves that are roughly equal in length.
South sudan seeks to revive oil production
South Sudan has the third largest oil reserves in sub-Saharan Africa, but most of its oil facilities have been destroyed in the civil war that started in 2013 – two years after it seceded from Sudan.
Some of its oilfields have recently restarted oil production, but returning to full production capacity will take time and outside help. Currently, South Sudan produces about 150,000 barrels per day, 40 percent of which goes to cover operating costs. The government is left with 90,000 barrels, but partners such as China’s CNPC and Malaysia’s Petronas take 20 percent of it. And even the remaining profit has to be shared with Sudan’s government in Khartoum as South Sudan has to use its infrastructure to process and transport its oil. Every barrel produced is vital to Africa’s youngest nation, as oil provides nearly all of its gross domestic product.
China sells 1,500 t of imported 2013 wheat at auction of state reserves
China sells 1,500 tonnes of imported 2013 wheat at auction of state reserves at an average price of 1,950 yuan ($280.94) per tonne, the National Grain Trade Center said on Tuesday.