Oil prices surge amid tightening crude market
Oil prices rose 1 percent on Friday as involuntary supply cuts from Venezuela and Iran plus conflict in Libya supported perceptions of a tightening crude market, while upbeat Chinese economic data eased concerns about waning crude demand.
The oil market also followed global stock markets higher after strong earnings at JPMorgan Chase & Co. The dollar index slipped to its lowest against the euro in more than two weeks, making crude cheaper for non-US buyers.
Brent crude oil futures rose 72 cents, or 1.02 percent, to settle at $71.55 a barrel. US West Texas Intermediate (WTI) crude futures ended the session up 31 cents, or 0.5 percent, at $63.89 a barrel. Both benchmarks notched a weekly gain of about 1 percent, which was Brent’s third consecutive week of gains and the sixth straight rise for WTI.
OPEC and its allies meet in June to decide whether to continue withholding supply. Though OPEC’s de facto leader, Saudi Arabia, is considered keen to keep cutting, sources within the group said it could raise output from July if disruptions continue elsewhere.
Gold prices down, takes biggest fall in two weeks
Gold inched lower on Friday, having posted its biggest daily decline in two weeks in the previous session, as the impact of a weak dollar was offset by gains on Wall Street.
The metal had broken below the key psychological level of $1,300 on Thursday to hit a one-week low due to sharp gains in the dollar.
Spot gold edged 0.1 percent lower to $1,290.71 per ounce in last New York trade on Friday. US gold futures settled 0.1 percent higher at $1,295.2 an ounce.
Silver was down 0.1 percent at $14.94 an ounce, but was on track for its third weekly decline. Spot platinum rose 0.1 percent to $888.11 per ounce, but was on track to snap four straight weeks of gains. Palladium climbed 0.6 percent to $1,373.02 per ounce and was up 0.3 percent for the week.
Raw sugar, Arabica coffee inch higher
Raw sugar futures on ICE rose on Wednesday, supported by stronger energy markets while arabica coffee firmed as it consolidated above last week’s 13-year low.
May raw sugar settled up 0.03 cent, or 0.2 percent, at 12.81 cents per lb. Oil prices were up on Wednesday and gasoline prices jumped following the release of data showing the largest drawdown in U.S. gasoline stockpiles in about a year and a half.
A rally in Brazilian ethanol in particular helped support sugar, as that can encourage cane mills in the country to produce more ethanol rather than sugar, said Michael McDougall, managing director at Paragon Global Markets in New York. McDougall was also watching dry weather in parts of sugar-growing China, which could prompt imports. Still, “highly visible producer pricing (supposedly mainly Thais) is continuing to put a cap on May at 12.80 and scale up from there,” consultants Agrilion said in a note. May white sugar settled down $1.50, or about 0.5 percent, at $326.70 a tonne.
CBOT wheat ends lower
Chicago Board of Trade wheat futures closed lower on Wednesday for a fifth straight session on technical selling and pressure from plentiful global and domestic supplies, traders said. However, MGEX spring wheat futures closed higher on concerns that a blizzard bearing down on South Dakota would further delay spring wheat planting in the region. CBOT May soft red winter wheat settled down 1-1/2 cents at $4.58 per bushel. K.C. May hard red winter wheat ended down 1-1/4 cents at $4.26-1/4 while MGEX May spring wheat rose 7-1/4 cents at $5.30-1/4. Traders are still digesting this week’s US Department of Agriculture supply/demand report in which the government raised its estimates of US and global 2018/19 wheat ending stocks more than most analysts had expected. Ahead of the USDA’s weekly export sales report on Thursday, analysts expected the government to report US wheat export sales in the week to April 4 at 400,000 to 700,000 tonnes (old and new crop years combined).
Zinc market braced for Chinese smelter output rise
Zinc prices touched a two-week low on Wednesday on concerns that Chinese smelters will increase output and create a surplus. Other industrial metals fell after the International Monetary Fund (IMF) cut its global growth forecasts, pointing to weak future demand, and the United States threatened to impose tariffs on goods from the EU.
Benchmark zinc on the London Metal Exchange (LME) traded up 0.1 percent at $2,862.50 a tonne in official rings after hitting $2,842, the lowest since March 26. Shortages had driven zinc to a nine-month high of $2,958 on April 1, but the supply situation is expected to change rapidly after Chinese treatment charges soared to $240 a tonne from a low of $12.50 at the start of 2018. Smelters were likely to seize the opportunity to make money by ramping up production in the second quarter, Deutsche Bank analyst Nick Snowdon quoted as saying.
Global mine supply of zinc– mainly used for galvanising steel – is expected to rise 6.4 percent this year to 13.87 million tonnes, according to the International Lead and Zinc Study Group (ILZSG).
Malaysian palm oil falls more than 2pc
Malaysian palm oil futures fell more than 2 percent to a one-week low in evening trade on Wednesday as an official data release from the Malaysian Palm Oil Board (MPOB) showed that March end-stocks and output were higher than forecast.
The data, released during the midday break, showed that March end-stocks were down 4.6 percent from February at 2.92 million tonnes, while output rose 8.3 percent to 1.67 million tonnes. Meanwhile, exports surged by 22.4 percent from February to 1.62 million tonnes. The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was down 1.9 percent at 2,170 ringgit ($528.62) a tonne at midday. It earlier fell as much as 2.6 percent to 2,155 ringgit, the lowest level since April 2. In related oils, the Chicago May soybean oil contract was down 0.7 percent and the May soyoil contract on the Dalian Commodity Exchange rose 0.2 percent. The Dalian May palm oil contract, meanwhile, slipped by 0.4 percent.
Brazil ships 14.2pc more bags of coffee in March
Brazil exported 2.64 million 60-kg bags of green coffee in March, 14.2 pct more than the same month a year earlier, exporters association Cecafé said on Wednesday.
The world’s largest coffee producer and exporter shipped 2.47 million bags of arabica coffee, 10.4 percent more than in March 2018, and 172,740 bags of robusta, 125.7 percent higher.
Emirates global aluminium $3.3bn refinery starts operations
Emirates Global Aluminium (EGA) said on Wednesday its $3.3 billion Al Taweelah alumina refinery in Abu Dhabi had commenced operations.
The refinery is expected to produce 2 million tonnes of alumina a year once fully operational, EGA said in a statement. The facility is located in the Khalifa Industrial Zone Abu Dhabi, which is next to the deepwater Khalifa Port.