WORLD COMMODITIES TRADING
World oil prices tumble on fresh trade tensions, record us crude output
Oil prices fell on Friday, with US crude dropping more than 4%, on fresh trade tensions and record high US crude production, but they still ended the month higher as OPEC watchers expect an extension next week to a pact to throttle oil output beyond March.
Brent crude futures LCOc1 settled down $1.44 at $62.43 a barrel, and was down 1.5% on the week. Still, the contract posted its biggest monthly gain since April with a rise of about 6%.
West Texas Intermediate (WTI) futures CLc1 settled down $2.94 at $55.17, falling of 4.1% on the week, after three consecutive increases. On a monthly basis, WTI is poised for a jump of about 2.3%, its highest since June.
Trading volumes were low due after Thursday’s U.S. Thanksgiving Day holiday.
Both benchmarks rose in November partly on expectations of the United States and China reaching an initial deal trade deal by the year-end, that could lift doubts over future demand for crude, along with it the health of the global economy.
Gold prices move higher
Gold prices gained on Friday as markets awaited further developments on US-China trade talks after Beijing said it would retaliate against Washington for passing a law in support of Hong Kong protesters.
However, the metal was on track for its biggest monthly decline since June 2018.
Spot gold was up 0.4% at $1,463.59 an ounce as of Friday trade in New York. It has shed around 3.3% this month. U. gold futures settled 0.6% higher at $1,470.20 per ounce.
China warned on Thursday it would take “firm counter measures” in response to US legislation backing anti-government protesters in Hong Kong.
Investors have been optimistic about an imminent “phase-one” trade deal between the world’s two largest economies, lifting world stocks to record levels and dampening demand for safe haven assets such as bullion.
Among other precious metals, silver gained 0.8% at $17.01 an ounce. Platinum dropped 0.7% to $895.25 in the session, but extended gains for a third straight week. Palladium was steady at $1,840.52 per ounce.
NZ dairy farmers producing more milk from fewer cows
The 2018-19 cow census shows that while total numbers have remained relatively stable, New Zealand’s cows are producing more milk than ever before. The latest New Zealand Dairy Statistics released by DairyNZ and Livestock Improvement Corporation (LIC) revealed farmers’ focus on productivity and efficiency was paying off with milk production increasing despite cow numbers stabilising.
New Zealand reached record milk production per herd and per cow this year, with dairy companies processing 21.2 billion litres of milk containing 1.88 billion kilograms of milk solids – both up 2.4 percent on the previous season. The latest count showed that New Zealand has 4.946 million milking cows – a decrease of 0.9 percent from the previous season.
Russia to press OPEC+ to change its oil output calculations
Russia is likely to call on fellow oil producers to change the way Moscow’s output is measured when most of the world’s biggest oil-producing nations meet next month in Vienna, Russian and OPEC sources quoted as saying last week.
For three years OPEC and non-OPEC nations have curbed oil output in order to balance the market and support prices, but Russia has been measuring its production differently to the others.
Unlike Saudi Arabia and other OPEC producers, Russia has been including condensate – a high-premium light type of crude oil mainly extracted during gas production – in its crude oil production numbers.
In the past this has caused no problems for Moscow, but with Russia launching new gas fields in the Arctic and East Siberia and opening a new gas pipeline to China, its gas condensate production is rising.
That means it is not complying with its quota under the pact reached by OPEC and non-OPEC producers, something it is keen to avoid, according to Russian and OPEC sources.
Tea market analysis
The scope of the global tea market was appreciated at US$ 12.63 billion in 2018. The range is projected to touch US$ 18.42 billion by 2025, growing at a CAGR of 5.5 percent for the duration of the forecast. This could be attributed to awareness regarding health benefits pertaining to tea consumption.
As such, majority of global population has started making tea intake as a routine. Besides, growing urbanized population and middle class of several developing economies is impacting the consumption of tea in its various forms. Tea production as well as consumption has always held a strong correlation. In other words, tea production is directly proportional to tea consumption. FAO (Food and Agricultural Organization of the United Nations) states that production of tea did witness a yearly rise of 4.4 percent from 2007 to 2016.
Tea consumption also witnessed rise along the same lines. The same trend is expected to continue in the next 5-7 years as well. The ever-increasing usage of tea is likely to bring premium products to the market. For instance – in economies like the U.S., super-premium and premium products hold the largest market share. Even in the Europe consumers are opting for niche and luxurious flavors in form of customized offerings. Nutritionists are focusing on consumption of tea due to contents like phytochemicals, flavonoids, and anti-oxidants.
Coal production in India up by 164.58 mt in 5 years
Raw coal production in the country has increased from 567.77 million tons (MT) in 2013-14 to 730.35 MT in 2018-19, Union Coal and Parliamentary Affairs Minister said in Lok Sabha. He said that India had to import 234 MT coal last year for which it lost Rs 1.7 lakh crore foreign exchange. All India raw coal production increased from 565.77 MT in 2013-14 to 730.35 MT in 2018-19, an absolute increase of 164.58 MT as compared to increase of coal production of 73.01 MT between 2008-09 and 2013-14.
The minister said while there was a positive growth in production in the first quarter of the current year (April- June 2019), production has been slipping since July. This is largely because of heavy rainfall witnessed in coal mining areas of the country, he said.
Iron ore price: world steel production shrinking
World Steel Association data on Wednesday showed a 2.8 percent decline in global steel output in October to 151.5 MT with production down across all regions. The 50-year old industry body estimates that crude steel production in China, which is responsible for more than half the global total declined 0.6 percent year on year in October. The decline came on the back of capacity cuts during the country’s 70th anniversary celebrations.
China also places curbs on production during the winter months through March, but thanks to surging output earlier in 2019, year to date steel production is still up 7.6 percent to 746 MT. US output also fell during October, declining 2percent in year on year terms to 7.4 MT. Given the nearly 40percent drop in steel prices in the country over the past year as the effect of anti-dumping measures against China fade, production declines have been modest.