Libya, Nigeria oil output causes worries, geopolitical risks still present

Growing oil output in Libya and Nigeria is causing worries on OPEC’s ability to boost up crude prices.  Also, constant conflicts in the two nations might possibly keep a cap on their output.

Libya’s production came at levels higher than 800,000 bpd. It is the first time since 2014. Back then the civil war broke out. In the meantime, Nigeria is refreshing big infrastructure damages; caused by military attacks. Last year, they almost cut country’s production for 50%.

Libya

Libyan commander said to put out a power-sharing agreement, which will be beneficiary for country un every way. It will also have impact on oil supply. They have sent the General Khalifa Haftar to meet with UN-backed Prime Minister Fayez al Sarraj.

Still the ”risk officials” believe it won’t be easy to keep stability in next few months.

Impacted by these happenings, the firm projects oil exports will fluctuate between 500,000 and 700,000 bpd. Till the end of 2017.

Following, funding problems and a lack of foreign workers at the National Oil Corp is definitely going to limit the risk that oil output will boost.

Geopolitical risks still remain very high in Libya.

 Nigeria’s militants ended their attacks on infrastructure

Niger Delta Avengers, known as a Nigerian military group which attacks the infrastructure projects, now ended their ”operations”. And at the same time they allowed major pipelines to continue pumping crude oil again.

The militants earlier requested for a larger share of the nation’s oil wealth for Deltans. They now feel like they have a voice in the capitol.

Simultaneously, the non-military approach used by Osinbajo, which includes promises of development money, has undercut the case for militancy.

But President Muhammadu Buhari has been abroad for much of the year receiving treatment for an undisclosed illness. That creates a political opportunity for vested interests in Buhari’s inner circle, who are uncomfortable with the northern-born president’s relatively close relationship with his deputy. This could undermine militants’ trust in the capitol to the extent Osinbajo is marginalized. (CNBC reporter)

“At the moment it would be very difficult, but not impossible. I can’t see a path to that kind of outcome, but this is Nigeria,” said a Nigerian source.

RBC Capital Markets lists Nigeria at its highest geopolitical risk level, due to “the potential for a turbulent political transition.”

Exemptions continue?

Despite concerns about growing oil supply, there is no sign yet that OPEC will push Libya and Nigeria to turn off the tap when they meet next week.

The cartel could ask a production shutter similar to one given to Iran. Iran is allowed to raise outputs to a certain point. As it is rebuilding its energy industry, after years and years of crippling sanctions.

Nigeria’s oil minister said in January his country will consider reductions once its output returns to 1.8 million barrels a day, but he didn’t say how deeply it would cut.

“It remains to be seen whether there’s political will behind that.” Cheto said. “A lot of that will depend on whether Buhari consents to it.” (CNBC)

 

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Iran agrees on extending the cuts, if allies sign

17 May, Wednesday: You should know about Today’s Market:

  • Concerns over Trump dominate headlines
  • Fed rate hike bets continue to recede
  • Dollar continues decline, gold strengthens on stimulus delay concerns
  • Global stocks shift to risk-off mode on Trump worries
  • Oil slips on crude inventory build

For further info on these subjects, visit: http://www.investing.com

Iran’s Oil

According to some unofficial news coming straight from Iran, the OPEC’s third largest producer is interested in participating in further oil output cuts. In condition that there is of course, an agreement between other participating countries.

Saudi Arabia and Russia, concluded a deal on Monday saying they will extend output cuts for further 9 months, entering the 2018. The aim is to erode a existing glut. These 9 months would be more than 6 months previously discussed.

 

Kuwait

Kuwait, as one of the producers, said on Tuesday it supports the proposal.

Iran was the only OPEC supporter agreed to boost its output under the supply cut deal. It will hold presidential elections on Friday. The Iranian position is less predictable, but it will soon be very clear.

“This statement shows the commitment of OPEC and major non-OPEC oil producers to bringing stability to the oil market, in which is essential to have security of supply in coming years.”(Reuters)

– Iran will probably agree to a 9-month prolong of cuts, when OPEC and non-OPEC countries meet in Vienna,  on May 25. Assuming that other producers, for example Iraq, also will accept the deals.

 

Last year talks

Previous year, talking about the supply cut deal, Iran effectually argued to be allowed room to pump more, because it lost market share while being under Western sanctions. Back then they were raising the question of whether Tehran would sign up for a longer supply cut.

 

Presidential Elections In Iran

Friday is the day of presidential elections in Iran. President Hassan Rouhani is Facing 5 other candidates, for a second term, who are mostly prominent hardliners.

Bijan Zanganeh, Iranian Oil minister, in his speech on May 6, said he thinks producers are likely to extend the OPEC-led deal whiles he did not give a timeframe. He also added, by some real forecasts $55 is suitable price for oil.

Prices have gained back-up from the supply cut pact. But also, high inventories and rising U.S. production have acted as a brake on the recovery. Brent crude was trading at $52 on Tuesday.

“Low oil prices may bring satisfaction for some consuming countries in the short run, but in the long term as a result of reduced investment in new oil production, they could end up paying a much higher price for a barrel of oil.”

Some of the analysts predict a humble price recovery as likely in the summer months. In summer months it happens that U.S. gasoline demand seasonally rises, citing factors such as a likely drawdown in inventories.

“I think prices will move up to $51-$55 and in August may go to even $58.

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Copper Price Peaks Higher in SHFE

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Economic Calendar Today:

  • United Kingdom Average Earnings Index + Bonus rose to actual 2.3%, while forecast was 2.2%
  • UK Claimant Count Change. It came to 25.5K while the expected was -3.0K
  • European Consumer Price Index (CPI) y-o-y rose to actual 1.9% while the expected was 1.8%
  • United States Crude Oil inventories at -0.930M, while the forecast was -2.333M

Inspired by www.investing.com

 

Morning Trade on SHFE

Amid expectations of increased Chinese demand and a weaker dollar, copper prices on the SHFE grew higher during Asian morning trade on May 17.

The most-traded July copper contract on the SHFE rose 210 yuan ($30.48) to 45,380 yuan per tonne as of 03:33 BST. Open interest of the contract was at around 216,944 positions on Wednesday morning. (Metal Bulletin)

Stronger demand has seen copper prices well backed-up this morning.

Shanghai copper premiums went up this week, because of a rise in buying interest from traders. As well as limited availability for authority and nearby bills of landing.

In addition, major Chinese copper producer Jiangxi Copper said on Tuesday that the country’s copper demand rose 22% month-on-month in March to 822,500 tonnes. Mainly driven by the property market and air conditioner sector.

 

Economic data

US April industrial production rose 1.0% month-on-month – the strongest monthly gain in three years.

“The data pulse overnight was robust, but market moves were more cautious, with US interest rate expectations trimmed and the dollar remaining under pressure,” (ANZ Research)

The dollar index was 0.13% weaker at 97.97 as of 04:00 BST on Wednesday morning.
Market is keeping eye on China’s One Belt One Road (OBOR) policy, though funding restrictions remain a key concern.

“Due to funding constraints, we do not expect OBOR opportunities to become meaningful over the next few years for China. Other than perhaps in very few selected sectors like railway equipment. We believe that, for investment demand, investors should focus on domestic stimulus policy which is far more influential on sectors including resources, materials, machinery and contractors.”  (M.Lynch. Research)

LME stocks

Beginning with LME copper stocks, they fell in today’s trade  by 2,650 tonnes to 322,500 tonnes. FIrstly, deliverable copper stocks at SHFE warehouses rose 799 tonnes to 72,742 tonnes yesterday.
Secondly,  losses in the SHFE-LME arbitrage held at around $90 per tonne. But some buying interest remains. Traders are more active in buying in order to deliver long-term tonnages.

Other base metal contracts

Observing the The SHFE July aluminium contract, it rose 0.36% or 50 yuan per tonne this morning to 14,015 yuan per tonne. Later, the SHFE July zinc contract gained 0.92% or 195 yuan per tonne to 21,505 yuan per tonne.

When considering the SHFE June lead contract, it slipped 0.13% or 20 yuan per tonne to 15,780 yuan per tonne. The September nickel contract rose 60 yuan or 0.08% to 76,660 yuan per tonne. Finishing with Tin, it’s contract was 1,050 yuan or 0.74% higher at 142,050 yuan per tonne.

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West Texas drillers could weaken any OPEC agreement on extending the cuts

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All the Oil producing countries which have a deal with OPEC, along with Russia, can extend their deals. But at the same time this will be a green light for United States oil producers.

If the price oscillates following levels between $50 and $60, these are the great news for the U.S. oil drillers. They will gain profit on way broadly group of drilling sites. OPEC’s new deal could speed up the market rebalance. Rather, the numerous U.S. shale drillers could also release bigger amounts to surpass OPEC’s price gains.

Mainly the market analysts wait for oil price to rise close to $60, or even $60 by the end of the year.  But the prices are not expected to climb much higher.

“Basically U.S. supply is coming on faster than we anticipated. Now you have a higher inventory level to begin with, and a slower decline. That means in our view, prices are likely to be lower on average.” (Francisco Blanch, Bank of America Merrill Lynch.)

“The Brent crude will come to average $54 per barrel this year, from an average $61 per barrel. ”

He doesn’t expect much of an increase neither for 2018. The Brent will probably gain the price of  $56 per barrel, versus his previous forecast of an average $65.

 

Different opinions

Ed Morse from Citigroup said he thinks it would be a way better if the OPEC agrees on a deeper cuts.

“I think this market will re-balance itself very quickly. The extension alone should result in deeper cuts.”

Deeper cuts would mean an “invitation for cheating” and “a sign of desperation in markets.” He explained that the re-balancing is already happening.

On contrary, Blanch said: “I think it’s pretty risky to deepen the cuts when they’ll be losing market share to shale. It seems to me that Saudi, Russia, and even the U.S., everyone needs oil price leveled at $60. The problem is, that by the laws of nature as well as of the economy, you can’t have both the quantities and the prices.”

Morse: “We don’t think U.S. production is going to stop the re-balancing of the market this year. It’s not enough to counter the cuts that are in place, particularly if they’re being extended.”

“We think next year will be more problematic. The shale drilling will accelerate and U.S. shale alone could meet the new demand in global growth.”

 

U.S. drillers

IHS Markit expects U.S. shale to grow by 900,000 bpd by the end of 2017. By the end of 2017, or entering the early 2018 the U.S. will be giving the record amounts of oil. Based on some U.S. government reports, their production rose to 9.3 million barrels in previous weeks.

“You can certainly say a lot of shale today will be competitive between $40 and $50 a barrel. The question mark is what’s going to happen with costs. We really think the costs this year in the Permian will go up 15 to 20 percent.”  (Daniel Yergin vice chairman of IHS said. “Rising costs will temper activity somewhat.”

Yergin stated that shale is now at medium cost production.

Permian, West Texas

Permian is currently the most active shale. But drilling could open up Eagle Ford in Texas or Bakken in North Dakota, following the upsurge in prices.

“Other plays still remain on the sidelines in this $50 environment. When we were growing at a million barrels in the U.S., it wasn’t Permian. It was Bakken and Eagle Ford.” (Helima Croft, RBC)

“The other thing about shale is it has a very high decline rate. The shale did come back stronger. Rigs are returning and for now it remains largely a Permian story.”

Analysts have expected the market to get a backup from the summer driving season. So far, U.S. gasoline demand has been softer than expected.  That could definitely impact the market, and it should see higher prices this summer .

 

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Metals trade today: LME & International Economic Events

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LME Today:

Metals prices on the LME slightly declined during morning trade today. Prices were down for an average of 0.6%.

Recollecting the positive Monday, that had closing prices up for about 0.3%. Nickel had a fall of 1.7%, but the average gain would have been 0.6% led by a 1.2% rise in aluminium price.

Firstly, spot precious metals were up for about 0.4% this morning. Gold prices are up 0.2% at $1,233.50 per oz, the rest are all up 0.5%. This comes after a mixed day’s performance on Monday when palladium prices dropped 1.1%, silver and platinum prices were up around 1.1%, and gold prices were up just 0.2%.

Secondly, observing morning trade in SHFE, copper and aluminium prices were a bit up, with copper prices at 45,220 yuan ($6,555) per tonne.  Other base metals complex are down an average of 0.8%. Spot copper prices in Changjiang are up 0.1% at 45,120-45320 yuan per tonne, while the LME/Shanghai copper arb ratio is weaker again at 8.10.

International Markets & Main Economic Events

Thirdly, Brent crude oil prices are up 0.3% at $51.92 per barrel. The market oscillates on a likely OPEC deal extension. The yield on the US ten-year treasuries is little changed at around 2.33%.

Equities on Monday were firmer, the Euro Stoxx 50 closed up 0.1% and the Dow closed up 0.4% at 20,982. Asia has generally seen follow through buying interest this morning with the Nikkei and ASX 200 up 0.2%, the CSI 300 is up 0.1%, the Kospi is up marginally, while the Hang Seng is bucking the trend with a 0.3% decline.

If we have a closer look, the dollar index is showing weakness again.  It is now leveled at 98.75, having seen a recent high of 99.89. For now the 2017 trend is to the downside, with recent lows at 98.54.

Following, the euro is now stronger at 1.0994, it looks well placed to push higher. Also the Australian dollar at 0.7425, seems to push higher. While the sterling and the yen are flat. Sterling at 1.2912 and yen at 113.49.

Economic data

Japan’s tertiary industry activity slipped 0.2% after a 0.2% climb previously.

later there is data on French and UK CPI and a host of other UK price data and leading indicators, Italian and EU GDP, German and EU ZEW economic sentiment and data on the EU trade balance. US data includes: building permits, housing starts, industrial production, capacity utilization rate and mortgage delinquencies – see table below for more details.

Chinese infrastructure projects

President Xi Jinping’s oath of $78 billion worth of financing for infrastructure projects, indicates the One Belt One Road plan is continuing.  It should be long-term backup for metals’ demand. This affected positively almost all the metals on Monday. But if that will be further trend, we will see soon.

 

Other Base Metals

Nickel started to fall yesterday, while copper and aluminium were showing some weakness this morning. Zinc and lead prices are looking more fragile. Today’s lead prices setting a fresh low at $2,092 per tonne. Unless buying emerges soon, the path of least resistance looks set to remain to the downside.

 

Precious Metals

Most of the precious metals are more solid, their recent price weakness appears to have induced agreement hunting.

Except palladium, where resistance above $820 per oz. It seems to be acting as a cap and lack of upside progress is encouraging profit-taking.  Seems like silver and platinum have currently looked oversold.

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Elliott pressures BHP to get rid of its petroleum business

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Petroleum business

Today, Elliott Management increased the pressure for strategic changes at BHP. It is asking for a detached review of the mining giant’s petroleum business.

Elliott, as important investor, has built up a 4.1 percent stake in BHP’s UK-listed arm. It is now urging changes, cause it needs to boost up shareholder value. They consider that there are clear signs the market will be receptive to a new strategy for BHP.

“There is extremely broad and deep-rooted support for pro-active steps to be taken by management. To achieve an optimal value outcome for BHP’s petroleum business following a formal open review.” (Reuters)

 

Changing the structure

Firstly, Elliott is pushing for BHP to break down its dual-listed structure. Secondly, it asked BHP to spin off its U.S. oil and gas assets, and boost returns to shareholders. It gave the tasks to BHP at April 10th – BHP rejected all of them.

They sent the latest letter just hours before BHP CEO Andrew Mackenzie was supposed to speak at a Bank of America Merrill Lynch mining conference. Which was happening in Barcelona, and was being attended by Elliott.

“This latest move by Elliott is well-timed to coincide with Mackenzie’s speech. It almost forces BHP to directly address them on this.” Said an analyst

BHP was disappointed because Elliott presumed the company was not open to suggestions. And that it had been deceiving in its response to the New York-based investor’s calls for a change in strategy.

“We reject both claims.” BHP said.

BHP expected to meet with Elliott in Barcelona.

“The current period of shareholder activism could result in a break-up and/or a significant alteration of the company’s structure.” (Citi bank)

 

Listing Shift

Responding to concerns raised by the Australian government, Elliott on Tuesday backtracked on its proposal for BHP to have its main listing in London. Explaining that it could remain incorporated in Australia and stay an Australian tax resident, retaining full listings on the Australian and London bourses.

BHP has said the costs of scrapping its dual-listed structure significantly outweigh the benefits.

 

BHP buybacks

Elliott also criticized BHP’s track record on share buybacks and suggested the company make a $6 billion buyback in 2018.

If the current valuation remains at the same level, this would lead to $2.4 billion in value accretion. Which is equivalent to more than 12 times Elliott’s expected costs of unifying BHP’s dual listings.

Elliott estimated this cost of unification at $200 million.  In addition it said BHP’s $1.3 billion estimated cost was overpriced.

Mackenzie already emphasized before that it is the wrong time for BHP to sell its U.S. petroleum assets. The oil prices are low,  still somewhere near $52 per barrel.

In conclusion, BHP has also searched to highlight the action it is taking to divest non-core parts of its U.S. shale assets.

 

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ArcelorMittal or IIG? Bosnian iron ore mine for sale

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Bosnian Iron ore mine for sale

The largest steel producer in the world, ArcelorMittal has said to Bosnia’s officials it will take legal action, to protect its ownership rights. If they decide to sell government-owned stake in the Ljubija iron ore to the opposite buyer.

ArcelorMittal owns a steel plant in Zenica. Which is located in central Bosnia. There it processes iron ore from the mines it owns in Prijedor in the north of the country.

Then, it also owns 35.1 percent in the Ljubija iron ore mine. Government of Bosnia’s autonomous Serb Republic has a 64.9 percent stake in this mine. And it is put up for sale.

The ArcelorMittal has offered to buy out the government’s stake in the Ljubija mine. Meanwhile the government already decided to sell it to rival customer. Israeli Investment Group (IIG). Explaining that the IGG proposed higher price and  also promised bigger investment.

 

 

The decision

Parliament will bring final decision about the sale on Tuesday. Still it is not comprehensive if they will have the major backup.

Lakshmi Mittal, ArcelorMittal CEO has consigned a letter to the Serb Republic government. There he “emphasized the very serious negative impacts for jobs and the economies of both Prijedor and Zenica.” Which will happen if they confirm the offered sale of the Ljubija mine stake to IIG.

“The letter also gave notice of our intention to protect our contractual rights by all means possible, if necessary through legal action in the appropriate international courts.” (Reuters)

When asked about this, Milorad Dodik said that he hadn’t yet received the letter and refused to comment. IIG also, wasn’t available for comments on this matter.

Dodik is The President of Serb Republic in Bosnia who supports the sale to the Israeli group.

 

Arcelor Mittal workers

 

AM Prijedor employs 850 workers. It has invested 117 million Bosnian marka ($65 million) in the mines over the past 12 years. Its steel plant Zenica employs about 2,400 workers.

Biju Nair, ArcelorMittal Zenica’s CEO stated that if they sell Ljubija mine to a rival bidder,  Zenica plant would switch to a different production system. And that wouldn’t be convenient for the iron ore from Ljubija. It could also lead to job losses at both Prijedor and Zenica.

“A new owner could threaten the supply of iron ore from Prijedor at commercially acceptable prices. If so, we can change to production without iron ore, using the Electric Arc Furnace.” (Reuters)

Opposition parties in Bosnia, as well as ArcelorMittal Prijedor trade unions, are against the sale to the IIG.

Protests in Prijedor & the budget deficit

Today, police in Prijedor interdicted AM workers protests against the sale to the IIG. They already protested last week in Banja Luka.  When the parliament was discussing the decision on the sale.

The regional government wants to go ahead with sale, cause it has a huge budget deficit. And the IMF stopped its cash payouts to Bosnia. Because of the reform delays.

“Israeli-Russian-Kazak-African investment group” offered 92 million Bosnian marka for the mine, and promised a 65 million marka investment over the next couple years.

ArcelorMittal has offered 63.6 million marka and investment of 63 million marka over the next 10 years.

 

 

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Oil price rises to $52; Russia & Saudi Arabia discussed the outputs in Beijing

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Oil price today reached the level of $52 a barrel. Due to Russia and Saudi Arabia’s agreement on cuts. They almost definitely consider that the Supply cuts have to extend into 2018, in order to achieve the rebalance of Oil market. And to keep the OPEC-lead deal, which is crucial for the benefits of all producing countries.

In a meeting today, Khalid A. Al-Falih, and Alexander Novak agreed that supply cuts need to extend to the period of next nine months. Until march 2018, which is more than the previous 6 months considered.

 

The price & Beijing meeting

Brent crude rose $1.20 to $52.04 a barrel by 0847 GMT (4.47 a.m. ET) and traded intraday at $52.26, the highest since April 26.

U.S. crude was up $1.18 at $49.02 a barrel.

Oil obtained back up from this supply deal. Still, inventories remain high and output from other producers such as the United States is rising. Affecting global prices and keeping them below the $60. Saudi Arabia will definitely like to see prices above $60.

Beijing, May 15: “There has been a marked reduction to the inventories, but we’re not where we want to be in reaching the five-year average.” (Khalid al-Falih)

“We’ve come to the conclusion that the agreement needs to be extended.”(Novak)

As said many times before, OPEC agreed in 2016, on cutting the outputs for 1.8 million bpd.

The two ministers today in Beijing said they were hoping that the other producing-countries will join the cuts. So they could build a global volume terms as before.

 

Newspaper comments on the Beijing meeting & its subject:

 

Market participants, oil traders and all the other analysts, were a bit stunned by the strong sound of the announcement.

“It is certainly a strong statement to include already 2018, while it may also be aimed at improving the chances of keeping other participants on side when it comes to the next round of talks in 10 days.” (JBC Energy)

The most important meeting of all the producing countries will take part on May the 25th in Vienna. OPEC and some non-OPEC producers will agree on whether to further cut the production. OPEC invited 2 countries which are not included in recent deals, to join the meeting. Those are the two small producers, Turkmenistan and Egypt.

 

 

United States

Still, besides all the agreements and producing OPEC allies, there always exists a problem amid these deals. The U.S. drillers, non-stopping their huge outputs, are affecting the global supply (oversupply) and having a big impact on prices.

They  added oil rigs for a 17th week in a row. Expanding a 12-month drilling recovery, and making a fuss with their impacts on global market.

 

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SHFE morning trade: Copper up due to Lower production in Chile

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Main Economic Events Today:

  • China Industrial Production y-o-y fell to actual 6.5%, while expected was 7.1%
  • United Kingdom Prime Minister Theresa May Speaks

This Week:

  • Empire State, Philly Fed Manufacturing for May
  • April China Industrial Production
  • Euro Zone Q1 GDP – Revised Reading
  • K. April CPI, Employment & Retail Sales
  • Japan Preliminary First Quarter GDP

 

Shanghai Futures Exchange

Firstly, copper prices on the SHFE recovered during morning trading on May 15. Due to the news that China had announced more funding for its One Belt One Road initiative. Copper price was as well impacted by reports of lower production in Chile.

The most-traded July copper contract on the SHFE rose 210 yuan per tonne to 45,240 yuan per tonne as of 10:59am Shanghai time.

Secondly, Chinese president Xi Jinping said One Belt One Road plan aims to connect China with Europe, Asia and Africa through various infrastructure projects.

 “The Belt and Road initiative, which was first proposed in 2013, offers the world’s second largest economy a chance to consolidate its political presence in the region. Additionally, the initiative provides China’s battered commodity intensive sectors, many of which are struggling to contain overcapacity, a lifeline to remain relevant for years to come.” (CBA Commodities)

“China has already committed $50 billion to date and that could grow exponentially in the next 5 years. The initiative, which could cost over $1 trillion, is clearly positive for commodity consumption. We note that construction will take place over decades. Realistically gather momentum in the 2020s and will inevitably face roadblocks from political interests of the 60 countries involved.”  (Metal Bulletin)

Thirdly, Cochico announced that copper production in Chile in 1H17 was down 14.6% year-on-year to 1.19 million tonnes, due to the strikes occurring during the period.

LME’s three-month copper contract was up $13 per tonne to $5,581 per tonne as of 03:55am London time.

SHFE, LME copper stocks fall 

Observing the open interest of the July copper contract, it was at around 219,134 position on Monday morning. Following, losses in the SHFE-LME arbitrage held at around $80 per tonne last week. Demand is keeping healthy levels due to the peak season. 
Also, deliverable copper stocks at SHFE-approved warehouses fell 20,238 tonnes or 9.4% week-on-week to 194,993 tonnes as of Friday May 12.
In the meantime, LME copper stocks fell by 7,350 tonnes to 329,375 tonnes on May 12.

Base metals broadly lower; Aluminium bit higher 

Fourthly, the SHFE July aluminium price rose 1.05% or 145 yuan to 13,975 yuan per tonne. Following, SHFE July zinc price dipped 0.09% or 25 yuan to 21,590 yuan per tonne.
Observing the July lead price, it slipped 1.05% or 170 to 15,965 yuan per tonne.
In conclusion, the SHFE September nickel price was 180 yuan or 0.23% lower at 76,830 yuan per tonne. And finishing with the SHFE September tin price who fell 1,240 yuan or 0.87% to 140,990 yuan per tonne. 


Currencies & data

 
The Brent crude oil spot price up 0.85 to $51.62 per barrel. Texas light sweet crude oil spot price also gained 0.79 to $48.59 per barrel.
Observing the Shanghai Composite, it was up 0.36% to 3.094.53. Most noteworthy, US Empire State Manufacturing Index and NAHB Housing Market Index will be released later today. The dollar index decreased 0.01% on Monday morning to 99.19.

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The upcoming week: Crude Oil Futures

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Short Recollection of last week

 

Beginning by observing the Oil futures; they settled on nearly plane levels on Friday. But still registered the first weekly gain in a month. Inspired by the news that key crude producers will extend output cuts to the period after June;

Firstly, on Thursday, U.S. West Texas Intermediate crude came to the highest since May 3 at $48.22.

Secondly, the U.S. benchmark went up for $1.62, or around 3.4%, after posting three consecutive weekly declines.

Noteworthy, in London Futures Exchange, Brent oil for July delivery added on 7 cents. Later coming to settle at $50.84 a barrel by closing. The global benchmark hit $51.16 a day before. This level was not seen since May 2.

Thirdly, observing the weekly movement, London-traded Brent futures recorded a gain of $1.74, or nearly 3.5%.

 

OPEC & non-OPEC

OPEC and non-OPEC oil producing countries  are discussing the extension of a global supply cuts.

Recently, some officials have suggested the possibility of further & deeper production cuts to help clear a supply glut & rebalance the market completely.

Starting this week, crude sank to a five-month low. Loped by concern over increasing U.S. crude output that has shaken investors’ faith in the ability of OPEC to rebalance the market.

Fourthly, data from energy services company Baker Hughes showed on Friday that U.S. drillers last week added rigs for the 17th week in a row. Indicating that further gains in their production are ahead.

 

The further U.S. drilling

The U.S. rig count rose by 9 to 712, extending an 11-month drilling recovery to the highest level since August 2015.

Observing natural gas futures for June delivery, they rose 4.8 cents. Which makes it the highest level since January 26 at $3.424 per million. British thermal units, up 1.4% for the session and about 4.9% higher for the week.

All the participants in the market race will see recent weekly information on U.S. stockpiles of crude and refined products on Tuesday and Wednesday.  To groove the strength of demand in the world’s largest oil consumer.

 

Meanwhile, investors will keep an eye out for a monthly report from the IEA for further evidence that global producers are complying with an agreement to reduce output this year.

 

Inspired by Investing.com; here are some important next week’s events which will likely have impact on market & commodity trades:

 

Tuesday, May 16

The IEA is going to publish its monthly evaluation of oil markets.

Later in the session the API will publish its weekly report about U.S. oil supplies.

 

Wednesday, May 17

The U.S. Energy Information Administration is to release weekly data on oil and gasoline reserves.

 

Thursday, May 18

 

United States government will give a weekly report about Gas supplies reserves.

 

Friday, May 19

Baker Hughes operates in more than 90 countries, giving the oil and gas industry  info with services for oil drilling, formation evaluation, completion, production and reservoir consulting. It will release weekly data on the U.S. oil rig count in Friday.

 

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