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Oil falls as global supply increases

Oil prices fell nearly 1 percent on Friday as global supply increased and investors worried demand growth could slow, pressuring US crude to its longest stretch of daily declines since 1984.

Crude futures benchmarks have slid about 20 percent or more since peaking in early October.

Benchmark Brent crude LCOc1 futures fell 47 cents, or 0.7 percent, to settle at $70.18 a barrel. During the session Brent fell below $70 a barrel for the first time since April, as much as 20 percent off four-year highs reached in October.

Brent slumped about 3.6 percent for the week and more than 15 percent this quarter.

US crude fell for the 10th straight day, the longest such streak since July 1984, according to Refinitiv data.

US West Texas Intermediate crude futures CLc1 declined 48 cents, or 0.8 percent, to settle at $60.19 a barrel. The session low was an eight-month bottom at $59.26, down more than 22 percent from its October peak. That decline puts US crude in “bear market” territory using a stock market definition.

Oil peaked in early October on the view that US sanctions on Iran that came into force this week would drain global crude inventories and bring shortages in some regions.

But other big producers have more than compensated for lost Iranian barrels. The United States, Russia and Saudi Arabia are pumping at or near record highs, producing more than 33 million barrels per day (bpd), a third of the world’s oil.

Return to oil production cuts in 2019 cannot be ruled out: OPEC

A return to oil production cuts by OPEC and its allies next year cannot be ruled out, two OPEC sources quoted as saying on Wednesday, to avert a possible supply glut that could weigh on prices.

The sources were responding to a report by Russia’s TASS news agency that Russia and Saudi Arabia had started bilateral discussions over possible curbs to output in 2019. Saudi-led OPEC and its allies including Russia decided in June to relax output curbs in place since 2017, after pressure from U.S. President Donald Trump to reduce oil prices and make up for supply losses from Iran. Asked whether discussions pointed to a return to supply cuts in 2019, one of the two sources, who are delegates from the Organization of the Petroleum Exporting Countries, said: “Certainly not the other way around.”

Gold plunges one-month low

Gold fell to its lowest in a month on Friday as the US dollar strengthened after the Federal Reserve reaffirmed its monetary tightening stance, seen as a negative for non-yielding bullion.

The Fed held interest rates steady on Thursday but is widely expected to raise interest rates in December – which would be its fourth hike this year – as it pointed to a healthy economy marred only by a dip in the growth of business investment.

Spot gold was down 1.3 percent at $1,207.91 per ounce in the New York early hour trading on Friday, having touched its lowest since Oct. 11 at $1,206.72. It was on track to end the week more than 2 percent lower, the steepest weekly decline since the week of Aug. 17. US gold futures fell 1.3 percent to $1,208.8 per ounce.

Also weighing on overall commodity market sentiment, was a decline in oil prices, with benchmark Brent crude falling to its lowest since early April. Gold can be used as a hedge against inflation fueled by higher oil prices.

Ssilver dropped about 2 percent to $14.13 per ounce, having touched its lowest since Sept. 18. The metal was headed for its worst week since February. Platinum shed 1.3 percent to $853 an ounce, while palladium fell nearly 1.3 percent to $1,110.10. (

 

US cash soymeal-export basis offers flat to weaker

Soymeal basis offers were flat to $1-$2 per ton lower in the US CIF and FOB export markets on Wednesday, pressured by sufficient supplies and limited demand, dealers said.

Soymeal shipped from the US Gulf Coast remained more expensive than South American supplies and that premium could expand for shipments in 2019, when Brazil and Argentina are expected to harvest big soy crops. The US Department of Agriculture will release weekly US export sales data on Thursday, and the agency also will update global supply and demand outlooks in a monthly report. Buyers were largely holding off on purchases ahead of the USDA data, dealers said. Chicago Board of Trade December soymeal futures were down $3.20 at $308.20 per ton at 11:38 a.m. CST (1738 GMT).

Wheat creeps higher as dollar slips after elections

Chicago wheat inched higher on Wednesday as a fall in the dollar after the US midterm elections added support following concerns about US crop conditions. Price movements in grain markets were limited, with corn and soybeans little changed, as investors looked ahead to Thursday’s monthly crop forecasts from the US Department of Agriculture (USDA), while also seeking more indications about a possible thawing in trade relations between Washington and Beijing.

The most active wheat futures were up 0.2 percent at $5.13-1/4 a bushel by 1235 GMT. The price benchmark earlier set its highest since Oct. 29 for the second day in a row, at $5.14-3/4. Wheat had rallied on Tuesday after weekly USDA crop data showed an unexpected decline in US winter wheat crop ratings, while also putting the sowing pace below the average of recent years just as cold weather is forecast for the week ahead. A cut to Russia’s grain export forecast by the country’s farm ministry, to 35 million tonnes from 38 million-39 million previously, underlined the potential for increased demand for US wheat as the 2018/19 season progresses.

China iron ore steadies as steel slide counters BHP’S rail halt

Chinese iron ore futures steadied on Tuesday, surrendering early gains, as concerns over tighter supply after BHP Billiton suspended all its iron ore rail operations in Western Australia were offset by a slide in steel prices. The world’s No. 3 iron ore supplier made the decision after a train, loaded with iron ore, at BHP’s Mount Newman railway line ran away at high speed for nearly 100 km (62 miles) before being forcibly derailed.

BHP has four processing hubs and five mines in the Pilbara region of northern Western Australia, connected by more than 1,000 km of rail infrastructure and port facilities. The most-traded January iron ore on the Dalian Commodity Exchange closed 0.1 percent lower at 510 yuan ($74) a tonne after rising as much as 1.7 percent intraday. Stocks of iron ore at China’s major ports stood at 141.65 million tonnes on Nov. 2, nearly 13 percent below a record high in early June, data tracked by SteelHome consultancy showed. Iron ore imports by China, the world’s top buyer, have largely been resilient this year, with January-September shipments reaching 803.34 million tonnes, down only 1.6 percent from a year earlier.

China to boost shale oil, gas production

China’s biggest energy producers are tapping more tight oil and gas wells, aiming to increase domestic oil and natural gas production at the world’s largest crude oil importer and what will soon be the world’s top natural gas importer.

As part of a government push to boost domestic energy supply, China National Petroleum Corporation (CNPC) and Sinopec are raising investments to increase local oil and gas production and are accelerating drilling at tight oil and gas formations in western China, the companies have recently announced. Oil demand continues to grow in China, while domestic production has been declining in recent years. This has led to additional—and costly—imports, making China the world’s largest crude oil importer. For natural gas, a similar trend is apparent. A government drive to have millions of residents switch to natural gas from coal has resulted in China surpassing South Korea last year to become the world’s second-largest liquefied natural gas (LNG) importer behind Japan.

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