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World oil prices decline

Oil prices fell on Monday after data showed Chinese exports declined for a fourth straight month, sending jitters through a market already concerned about damage being done to global demand by the trade war between Washington and Beijing.

Brent futures LCOc1 were down 44 cents, or 0.68%, at $63.95 per barrel by early Monday (Dec 9, 2019), after gaining about 3% last week on news that OPEC and its allies would deepen output cuts. West Texas Intermediate oil futures CLc1 were down 48 cents, or 0.81% to $58.72 a barrel, having risen about 7% last week on the prospects for lower production from OPEC+, which is made up of the Organization of the Petroleum Exporting Countries and associated producers including Russia.

Monday’s sudden chill came after customs data released on Sunday showed exports from the world’s second-biggest economy in November fell 1.1% from a year earlier, confounding expectations for a 1% rise in a Reuters poll.

China’s crude oil imports hit record high

China’s crude oil imports hit a record high on a daily basis in November, as refiners operated at high run rates to use up annual import quotas.

The world’s top oil buyer imported 45.74 million tonnes of crude, equivalent to 11.13 million barrels per day (bpd), according to data released by the General Administration of Customs on Sunday. That compared with 10.72 million bpd in October and 9.61 million bpd in November last year. For the first 11 months of 2019, China brought in a total of 461.88 million tonnes, or 10.09 million bpd, up 10.4% from the same period last year, the data showed.

Gold moves on steady note

Gold was steady on Monday (December 9, 2019) as investors await cues from the US Federal Reserve on interest rates later this week, while trying to size up the chances of a new round of US tariffs on Chinese goods.

Spot gold was flat at $1,460 per ounce by 0500 GMT. US gold futures was flat at $1,464.50.

The US Fed will meet on Dec 10-12 for an interest rate decision and investors were likely to focus on the outlook for next year and beyond. A strong US jobs data last week has renewed bets that the Federal Reserve would stand pat on interest rates. Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

Canada’s crude oil production will rise 50pc by 2040

Production of crude oil in Canada will grow nearly 50 percent by 2040 even though energy use per person will decline by more than 15 per cent, according to a long-term outlook released Tuesday by the Canada Energy Regulator (CER). The report, Canada’s Energy Future 2019: Energy Supply and Demand Projections to 2040, examines how new technologies, infrastructure developments and climate policy will impact Canadian energy consumption and production trends over the next two decades. The CER outlook forecasts that from 2018 to 2040, crude oil production will grow by nearly 50 per cent — to about seven million barrels per day — while natural gas production increases by about 30 percent, to more than 20 billion cubic feet per day over the next 20 years.


China’s iron ore futures rise

China’s iron ore futures rose on Tuesday after Vale SA, the world’s largest iron ore miner, lowered its production outlook for the steelmaking raw material. The most-traded iron ore contract on the Dalian Commodity Exchange, expiring next month, closed up 1.7 percent at 651.50 yuan ($92.56) a tonne. It rose as much as 2.2 percent during the session. On the Singapore Exchange, the front-month January contract erased early gains and was down 0.4 percent. Vale said on Monday it would slash output from its Brucutu mine in Brazil for up to two months as it evaluates the stability of the nearby Laranjeiras dam, leaving the mine operating at just 40 percent of normal capacity. As a result, Vale lowered its production outlook for the first quarter of 2020 to a range of 68 million tonnes to 73 million tonnes from a previously-announced range of 70 million tonnes to 75 million tonnes.

US steel production falls by 2pc in October

Steel production in the United States fell by 2 percent in October, according to the World Steel Association. The Brussels, Belgium-based industry group, which tracks steelmaking in 64 countries around the globe, reported that steel production internationally fell 2.8 percent to 151.5 million tons in October. The United States, where about half the blast furnace capacity is concentrated on the Lake Michigan lakeshore in Northwest Indiana, ranked fourth worldwide with 7.4 million tons of steel produced in October, the most recent month for which data was available. China again led the world in steel output, making 81.5 tons of steel, or more than half of the world total. Steel production in China, however, was down 0.6 percent as compared to the previous month. India ranked second internationally with 9.1 million tons of steel in October, a 3.4 percent decrease. Japan made 8.2 million tons of steel in October, a 4.9 percent drop.

Australia’s wheat production estimate reduced

Australia’s agriculture department cut its forecast for wheat production in 2019-20 (April-March), on the back of unfavorable weather conditions in the country’s largest exporting region, Western Australia. The wheat production is expected to fall 16.8 percent to 15.85 million tonnes, the Bureau of Agricultural and Resource Economics and Sciences said in a report. The forecast is 8.4 percent, lower from the amount of wheat produced in 2018-19. The new forecast is almost in line with that of the National Australia Bank’s estimate of 15.5 million tones and Rabobank’s 15.8 million tonnes. The US Department of Agriculture projects the 2019-20 (July-June) production at 17.2 million tonnes.

Western Australia was hit by below-average winter rainfall and above-average temperatures, leading to a decline in production estimate for most winter crops, including wheat. Wheat production is forecast to fall 41percent in 2019-20 to around 6 million tonnes, reflecting a 37 percent fall in the average yield.

Poland repatriates pound 4bn of gold from Britain

Poland has repatriated pound 4 billion worth of gold from London to Warsaw in a top-secret operation involving planes, helicopters, high-tech trucks and specialist police. A total of eight night-time flights were made from an undisclosed London airport over the course of several months this year, transporting 8,000 gold bars weighing 100 tonnes to several locations in Poland.

The country’s gold reserves have been stored at the Bank of England for decades, having been evacuated from Poland at the outbreak of the Second World War amid fears they would fall into the hands of Nazis. Security firm G4S International Logistics were given the task of transporting the gold, which it described as one of the biggest movements of gold between banks in the world. A spokesman quoted as saying the final trip, which happened on November 22, saw trucks take 20 crates filled with bars from a facility in northwest London to a nearby airport.

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