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World oil prices decline

Oil prices slipped on Friday after China reported slower economic growth, pointing to lower fuel demand in the world’s biggest oil importer, although market sentiment was supported by supply cuts agreed last week by major crude producers.

Benchmark Brent crude was down 40 cents at $61.05 per barrel in Asian trade on Friday on course for a decline this week of around 1 percent. US light crude was 25 cents lower at $52.33.

China, the world’s No.2 economy, on Friday reported some of its slowest growth in retail sales and industrial output in years, highlighting the risks of the country’s trade dispute with the United States. Chinese oil refinery throughput in November fell from October, suggesting an easing in oil demand, though runs were 2.9 percent above levels a year earlier.

Concerned by mounting oversupply, the Organization of the Petroleum Exporting Countries and other oil producers including Russia agreed last week to reduce output by 1.2 million barrels per day (bpd), or more than 1 percent of global demand.

The International Energy Agency said on Thursday that it expected a deficit in oil supply to emerge by the second quarter of next year, provided OPEC members and other key producers stuck closely to last week’s deal to cut output.

As part of the agreement, de facto OPEC leader Saudi Arabia plans to reduce its output to 10.2 million bpd in January.

The IEA kept its 2019 forecast for global oil demand growth at 1.4 million bpd, unchanged from its projection last month, and said it expected growth of 1.3 million bpd this year.

Gold falls to its lowest in over a week

Gold fell to its lowest in over a week on Friday in New York and was on track to mark its biggest weekly decline in more than a month, as the dollar climbed on robust US economic data ahead of a U.S. Federal Reserve meeting next week.

Spot gold fell 0.4 percent to $1,237.60 per ounce as of 1:41 p.m. EST (1841 GMT). Earlier in the session, prices hit their lowest since Dec. 4 at $1,232.39. The yellow metal is down about 0.8 percent so far this week. US gold futures settled down 0.5 percent, at $1,241.40.

Markets are awaiting the Federal Open Market Committee (FOMC) meeting on Dec. 18-19, at which the U.S. central bank is widely expected to raise interest rates. The focus, however, would be on the outlook for 2019.

Among other precious metals, spot palladium was down 1.9 percent at $1,236.50 per ounce, after hitting an all-time high of $1,269.25 on Thursday. Despite Friday’s drop, the metal was on track to mark its third week of gains with prices up about 1 percent so far this week. Silver fell 1.2 percent to $14.58 per ounce. Platinum was down 0.7 percent at $787.70 per ounce and was set to post a sixth straight weekly decline.

US soybeans hit 4-1/2-month high

US soybean futures hit a 4-1/2-month high on Wednesday as China bought US soybeans for the first time since US President Donald Trump and his Chinese counterpart Xi Jinping met in early December. State-owned Chinese companies bought at least 500,000 tonnes of US soybeans, two US traders said, in deals valued at more than $180 million. But the market pared gains as news of the sale removed some of the uncertainty that had supported futures in recent days as rumors swirled about more imminent Chinese purchases.

As of 12:09 p.m. CST (1809 GMT), the Chicago Board of Trade (CBOT) January soybean contract was up 3-3/4 cents at $9.18-3/4 a bushel after reaching $9.28, its highest since July 31, and the highest for a most-active contract since June 15.

 

Paris wheat hits 8-week high

Euronext wheat hit an eight-week high on Wednesday as rising prices in Russia fuelled hopes that west European wheat will pick up more export sales in second half of the season. Wheat markets were also supported by firm soybean futures in Chicago as traders reported than Chinese importers had resumed major purchases of US soybeans following a recent trade truce between Washington and Beijing. Benchmark March milling wheat on the Paris-based Euronext exchange settled up 1.75 euros, or 0.9 percent, at 206.25 euros ($234.36) a tonne.

Malaysian palm oil futures higher

Malaysian palm oil futures ended higher on Wednesday, buoyed by gains in soyoil on the US Chicago Board of Trade after President Donald Trump said China was back in the market buying US beans.

The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange was up 0.9 percent at 2,033 ringgit ($486.01) a tonne at the end of the trading session. Trading volumes stood at 31,625 lots of 25 tonnes each at the close of trade. Palm oil is affected by movements of other edible oils, as they compete for a share in the global vegetable oil market.

India’s sugar output may drop next year

India’s sugar production could fall in 2019/20 as farmers are struggling to plant cane because of a drought in two of the country’s top producing states, according to multiple industry officials and traders.

A drop in production would slash exports from the world’s second-biggest sugar producer and support global prices that have fallen 15 percent so far in 2018. Cane is a perennial crop harvested 10 to 16 months after planting. The western state of Maharashtra is the country’s second-biggest sugar producer, while southern state of Karnataka ranks third. India’s production during the 2019/20 marketing year could fall to between 28 million tonnes and 29 million tonnes from this year’s estimated 31.5 million tonnes to 32 million tonnes, Naiknavare said.

London cocoa gains on fund buying

London cocoa futures rose on Wednesday, boosted by light speculative buying and expectations for a slowdown in supplies from top grower Ivory Coast, while robusta coffee set a new 2-1/2 month low.

March London cocoa was up 16 pounds, or 1 percent, at 1,608 pounds a tonne. Prices plunged on Tuesday, with dealers pointing to speculative selling in thin trade, coupled with a weak pound and worries about plentiful supplies this season. The funds have been pushing the price around and now we are seeing some corrective action, said one European dealer. The market was also supported by expectations that port arrivals in top grower Ivory Coast may start slowing after an initial surge.

German hard coal mining output down

Hard coal production from Germany’s two remaining mines will amount to 2.6 million tonnes this year, down from 3.7 million in 2017, mining association GVSt estimated on Wednesday.

Sales of all domestically mined coal totalled around four million tonnes in 2018, compared with 4.5 million tonnes last year, it said. This is in line with a national schedule to stop domestic mining completely by Dec. 31, 2018, in favour of cheaper imports. By setting the 2018 deadline, marking the end of 200 years of coal mining in the Ruhr valley, Germany won a battle with the European Commission over subsidies after the Commission had demanded a complete withdrawal by 2014. GVSt’s 2017 numbers were published in its annual report, while the 2018 estimate was made separately in reply to an enquiry. Germany also mines brown coal, or lignite, which is cheaper but highly polluting.

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