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World oil falls on weaker demand, slow economy

Oil prices fell about 1 percent on Friday after disappointing US job growth revived concerns about a slowing global economy and weaker demand for oil.

With surging US oil supply also unsettling markets, Brent crude futures fell 56 cents, 0.8 percent, to settle at $65.74 a barrel. The international benchmark gained 1 percent for the week.

US West Texas Intermediate (WTI) crude futures fell 59 cents, or 1 percent, to settle at $56.07 a barrel. WTI still ended 0.5 percent higher for the week, however.

US job growth almost stalled in February, with the economy creating only 20,000 jobs amid a contraction in payrolls in construction and several other sectors. The report dragged down US stock markets, along with oil futures.

China’s dollar-denominated February exports fell 21 percent from a year earlier, representing the biggest drop in three years, far worse than analysts had expected. Imports dropped 5.2 percent.

So far oil demand has held up, especially in China, where imports of crude remain above 10 million barrels per day (bpd). Yet a slowdown in economic growth could eventually dent fuel consumption and pressure prices.

Gold rebounds on bleak outlook

Gold rebounded on Friday as the dollar eased slightly and worries about a sharp global economic slowdown after the European Central Bank (ECB) slashed growth outlook were aggravated by weak Chinese data, boosting demand for the safe-haven metal.

Spot gold rose 0.6 percent to $1,292.52 per ounce as of 1305 GMT, while US gold futures gained 0.5 percent to $1,292.90. Elsewhere, palladium slipped 0.7 percent to $1,516.87 per ounce and was on track for its biggest weekly decline since the week ended Nov. 23.

Silver gained half a percent to $15.09, after slipping to its lowest since late December in the previous session.

Platinum was up 0.3 percent at $815.58 per ounce, after touching its lowest since Feb. 19 at $806.50 earlier. It was down about 4.7 percent for the week, its biggest percentage decline since end November.

Vietnam coffee trees face drought

Coffee farmers in Vietnam are struggling to secure sufficient water for their trees during the country’s dry season, while trading has started to pick up in Indonesia amid a mini harvest.

The Vietnam Coffee and Cacao Association said earlier this week that low water levels and threat of a drought in the Central Highlands, the country’s main coffee growing region, would hurt this year’s output. “Water levels at reservoirs are so low and many farmers are unable to water their coffee farms,” a trader based in the Central Highlands province of Dak Lak said. “Underground water level is also very low,” the trader said. “Farmers in the region have to drill wells deeper than 80 metres to find water.”

CBOT soybeans may revisit dec-27 low

The CBOT soybean May contract may break a support at $9.01-1/2 per bushel, and fall to the Dec-27, 2018 low of $8.93-1/2. The support is provided by the 86.4 percent retracement of the downtrend from $9.53 to $8.93-1/2. It works as the last barrier towards $8.93-1/2. The drop may pause around $8.93-1/2, which is a support and will be strengthened by another one at $8.91, the 61.8 percent retracement of the uptrend from $8.53 to $9.53. It could be difficult to gauge the depth of the current fall on the daily chart of May contract. However, the daily continuous chart presents a very bearish picture.

 

Palm dips on weaker edible oils, bearish outlook

Malaysian palm oil futures dropped on Thursday, in line for a second straight day of declines, on weaker related edible oils and bearish market outlook on palm prices and inventory levels.

The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange was down 0.4 percent at 2,148 ringgit ($526.21) a tonne at midday break. Weaker edible oils on China’s Dalian Commodity Exchange and overnight soyoil on the U.S. Chicago Board of Trade weighed on palm prices, a Kuala Lumpur-based trader said. Recent price forecasts at an industry conference were not very bullish, while inventory levels were not declining as much as expected, another trader said.

Shanghai aluminium hits near 3-week low

Shanghai aluminium fell for the third straight day on Thursday to a near three-week low due to rising inventories and concerns that a supply glut may outstrip demand in top consumer China.

Aluminium stocks in warehouses monitored by the Shanghai Futures Exchange (ShFE) rose by more than 10,000 tonnes last week to around 747,000 tonnes. Smelting capacity additions this year will put further pressure on prices, the brokerage said, adding that a rebound may only occur if there are enough production shutdowns to leave the market short.

EU wheat back near 7-month trough

Euronext wheat futures fell on Wednesday to close to last week’s 7-1/2 month low as Chicago prices resumed their recent slide. Benchmark May milling wheat on Paris-based Euronext settled 0.75 euro, or 0.4 percent, lower at 186.75 euros ($211) a tonne, not far off Friday’s low of 185 euros.

A steep drop in Chicago saw US wheat reverse technical gains from Tuesday and trade close to last week’s 11-month low for the global benchmark. Despite improved export sales for US and western European wheat in recent weeks, doubts over whether these zones can make up for a slow start to their export campaign have hung over the market. Traders said they were waiting to see if the renewed weakness in futures would prompt a new tender by Egypt, the world’s biggest wheat importer, which would provide more clues on export prospects.

China’s iron ore futures fall

Prices of China’s steel-making raw materials dropped on Wednesday after the top steelmaking city of Tangshan maintained the highest smog alert amid unfavourable weather conditions, while the government vowed to extend its anti-smog measures.

The level 1 alert, the highest in China’s four-tier pollution warning system, has been in place since March 1 and requires steel mills to curb output by 40 percent-70 percent or even stop production, depending on the scale of their emissions. The most-traded iron ore contract on the Dalian Commodity Exchange fell as much as 1.2 percent to 610 yuan ($90.86) a tonne, and stood at 610.5 yuan by the end of the session.

Sugar slips as worries over Brazil weather fade

Sugar futures hit two-month lows on Wednesday as worries over dry weather in Brazil continued to fade, while coffee futures slipped. May raw sugar slipped 0.2 cents, or 1.7 percent, to 12.22 cents per lb at 1541 GMT. Everyone was hanging their hat on dry weather in Brazil and now rains have come in great quantities,” said a dealer. Oil prices fell, adding pressure to sugar by encouraging farmers to crush cane to produce more of the sweetener rather than bio-ethanol. Speculators reduced their bearish stance on ICE raw sugar futures in the week to Feb. 26 to their smallest net short since mid-December, data showed. May white sugar fell $4.10, or 1.2 percent, to $338.80 per tonne.

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