WORLD COMMODITIES TRADING
World oil prices post strongest weekly gain
Oil prices rose on Friday, registering the strongest weekly gains in more than a month as support from optimism over a US-China trade deal, falling US crude stocks and possible action from OPEC to extend output cuts outweighed broader economic concerns.
West Texas Intermediate (WTI) crude futures settled 43 cents, or 0.8%, higher at $56.66 a barrel, clocking a weekly rise of more than 5%, its strongest since June 21. Brent crude ended 35 cents, or 0.6%, higher at $62.02 a barrel, logging a weekly gain of more than 4%, its best since Sept. 20.
Oil got a boost from signs of progress in talks on resolving the US-China trade dispute that has weighed on crude demand. Washington officials on Friday said the United States and China were close to finalizing the first part of a trade deal after months of a tariff war.
Gold steadies, palladium hits all-time peak
Gold steadied on Friday, paring earlier gains as equity markets rose and the dollar strengthened after Washington said it was close to finalizing parts of a trade pact with Beijing, but bullion was still on track for a weekly gain.
Deficit-hit palladium notched an all-time high, meanwhile, driven by short supplies of the auto-catalyst metal.
Spot gold was flat at $1,503.11 per ounce in New York trade on Friday, having earlier hit its highest since Oct. 3 at $1,517.70 gaining nearly 1%. The precious metal was up about 1% so far this week.
US gold futures settled mostly unchanged at $1,505.30. Elsewhere, palladium eased 0.4% to $1,769.59 an ounce, having earlier hit an all-time high of $1,785.50. Silver jumped 1% to $17.94 per ounce after hitting its highest since Sept. 25 at $18.33. It was up 2.5% for the week.
Punjab to ban sale of unpackaged milk from 2020
Punjab Food Authority (PFA) Chairman Umar Tanveer on Wednesday said the province would ban sale of open milk with effect from 2022. Speaking at a seminar organised by Pakistan Dairy Association (PDA), the PFA chairman said creating awareness about processed milk among small farmers and consumers was a difficult task, but PFA was fully determined to ensure provision of safe milk supply to all consumers. The authority, he said was checking the quality of milk at 40,000 outlets and they had discarded 600,000 litres of spurious milk alone in 2018. The key note speaker, Prof Dr Nevzat Artik, affiliated with Food Safety Institute University of Ankara, said Pakistan has more cattle, goat, and sheep compared to Turkey, but milk production was not up to the mark. Currently, the exports of dairy products from Turkey were around $325 million, whereas the country imported butter and cheese worth $92 million.
Vast majority of EU coal plants are unprofitable
Four-fifths of coal-fired power plants in the European Union do not make money, says a new report from Carbon Tracker, a think-tank focused on the impact of climate change on financial markets. The study suggests that utilities in Europe could lose 6.6 billion euros ($7.3bn) this year alone from inefficient and highly polluting facilities.
The report, Apocoalypse Now, recommends to policymakers and investors that coal should be fully phased out by 2030. Importantly, the research demonstrates that the coal industry cannot survive without major subsidies, amidst competition from affordable solar and wind power – in addition to cleaner and cheaper natural gas. The combination of strict air pollution regulations, falling renewable prices and rising carbon prices is making coal energy more and more unpalatable. In 2017, 46 percent of EU coal capacity was running at a loss. But now, the fraction has increased to 79 percent.
Russian wheat prices hit 5-month high
Export prices for Russian wheat last week hit their highest level in five months thanks to strong demand and growth in global benchmarks in Chicago, analysts said on Monday. Egypt’s state grain buyer GASC bought 285,000 tonnes of Russian wheat, 60,000 tonnes of French wheat and 60,000 tonnes of Ukrainian wheat in its tender last week.
Black Sea prices for Russian wheat with 12.5percent protein content and for the nearest supply were up $8 to $207 per tonne on a free on board (FOB) basis at the end of last week, agricultural consultancy IKAR said in a note. SovEcon, another agricultural consultancy in Moscow, pegged wheat prices at $205 per tonne, up $7.5. This is the highest level since May,” SovEcon said. Barley rose $2 to $181 a tonne.
China adds incentives for domestic natural gas production
Rapid growth in China’s natural gas consumption has outpaced growth in its domestic natural gas production in recent years. China’s natural gas imports, both by pipeline and as liquefied natural gas (LNG), accounted for nearly half (45 percent) of China’s natural gas supply in 2018, an increase from 15 percent in 2010.
To increase domestic production of natural gas, the Chinese government has introduced incentives for several forms of natural gas production. Natural gas production has recently grown in China largely because of increased development in low-permeability formations in the form of tight gas, shale gas, and to a lesser extent, coalbed methane. In September 2018, the Chinese State Council set a target of 19.4 billion cubic feet per day (Bcf/d) for domestic natural gas production in 2020. In 2018, China’s domestic natural gas production averaged 15.0 Bcf/d.
US crude oil production remains level last week: EIA
U.S. crude oil production remained level during the week ending Oct. 18, US Energy Information Administration (EIA) said Wednesday. According to the EIA, US crude oil production last week stayed the same as the previous week at 12.6 million barrels per day (b/d), up by about 1.7 million b/d year on year. This was the second week that the US crude oil production remained level after increasing for one week.
In the EIA’s latest Short-Term Energy Outlook released earlier this month, US crude oil production will average 12.3 million barrels per day (b/d) in 2019, up by 1.3 million from the 2018 level, and will rise by 0.9 million b/d in 2020 to an annual average of 13.2 million b/d. According to EIA, US crude oil production remained relatively flat during the first seven months of 2019 because of disruptions to Gulf of Mexico platforms and slowing growth in tight oil production. However, EIA expected growth to pick up in the fourth quarter as production returns in the Gulf of Mexico and pipelines in the Permian Basin come online to link production areas in West Texas and New Mexico to refining and export centers on the Gulf Coast.
Raw sugar hovers near one-month low
Raw sugar futures were drifting down towards the prior session’s one-month low on Wednesday, while London cocoa regained some ground buoyed by a weaker pound. March raw sugar was down 0.03 cents, or 0.25percent. at 12.15 cents per lb at 1120 GMT, hovering just above the prior session’s one-month low of 12.10 cents. Dealers said producer selling had been keeping the market on the defensive along with sluggish demand linked to slower economic growth and an expected rebound in production in India during the 2020/21 season. December white sugar rose $1.50, or 0.45percent, to $337.30 a tonne.