Russian exports; Gas and Oil production

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Russia expects balance in Oil market; in case production cut prolongs

 

Alexander Novak said Global Oil markets will come to a balance soon. If the production cuts extend till the early 2018; or late 2017. Entering the winter of 2018, a supply-demand will find its equilibrium.

“Judging from the current dynamics in the decline of the oil and oil products inventories, the markets will see such decline in inventories by the end of 2017 – early 2018. Which will lead to cuts in inventories to a five-year average.” (Reuters)

Despite currently cutting the production, global inventories are still high. They lead the crude back below $50 per barrel. Those were the oscillations earlier this month and it is constantly putting pressure on OPEC to extend the cuts to the rest of the year.

Russia’s Energy Minister Novak said that OPEC countries and other leading oil producers would discuss extending the deal. Considering the second half of the year or “maybe even further than that”.

Parameters of the agreement should not be changed. In a way that further cuts are very likely.

Novak added that Russia will  retain output cuts of 300,000 barrels per day. From the level of October 2016 as stipulated by the December 2016 deal.

”Russia’s oil output forecast of 549-551 million tonnes for this year remained the same. But it could change depending on the outcome of oil producer nation talks in Vienna later this month.”

 

Russian Natural Gas Exports to China

 

Alexei Miller today said Gazprom hopes to agree the main terms of natural gas exports to China from the Russian Far East, in 2H17.

The supplies of natural gas, coming from the Russian Far East should be an extension of an already signed 30-year contract on exporting. 38 billion cubic meters of natural gas going to China, from Siberian deposits.

 

OPEC losing its pricing power?

 

According to some CNBC news, Commerzbank said that OPEC is losing its power over market. It has limited impact on Oil prices, since it secured a deal to curb outputs. The global energy market is well shaken, and it is a big question whether OPEC will succeed to rebalance it in 2H17.

“The fairly short-lived effect of production cuts on oil prices shows that OPEC’s market impact via ‘supply control’ is very limited. We have been pointing out for years that OPEC has lost its ‘pricing power.” (Commerzbank)

“Even so, OPEC is unlikely to give away on cut extensions, it will extend the agreement instead.” Weinberg said.

Eugen Weinberg is a head of commodities research at Commerzbank.

“The relentless increase in U.S. shale supply has counterbalanced the production cuts that OPEC and Russia agreed on. And so, there is still a skepticism within supply and demand balance.” (CNBC)

 

 

 

 

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Oil Production; Summary of Main Oil News this week

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Russian energy ministry and output cut talks

The main official of Rosneft, Igor Sechin, said on Saturday that the Russian energy ministry had his backup in discussions over oil production cuts.

“The most important thing is to have a mechanism to defend our interests.”

In previous months, Sechin has expressed some suspicions about the ability of the OPEC. And its power to influence oil markets amid a shale oil production boom in the United States.

The countries: Oil producers, including OPEC and non-OPEC; agreed to cut output for 1.8 a day. This decision dates from last year, and will be active till June the 30th. It aims to reduce global oil inventories.

The Oil producing countries will meet later this month in Vienna, to discuss a possible extension of the deal.

 

Georgia nuclear plant construction (Southern Co)

Georgia Power and Westinghouse decided to transfer the Project management of Georgia nuclear power plant expansion, to Southern Co.

 

The temporary agreement until June 3 will allow construction of the plant expansion to continue.

Westinghouse Electric Co filed for bankruptcy in March, was hit by billions of dollars of cost overruns. At four nuclear reactors under construction, including at the Georgia project and another in South Carolina.

The Georgia project is owned by a group of utilities led by Southern Co.

Gasoline in India

Firstly, the gasoline consumption growth has been slowing since the middle of 2016, after rising for the previous two years.

Secondly, observing the last 9 months we see that consumption growth for most other fuels used for cooking and transportation is also slowing down.

 

Based on the current data, demand for liquefied petroleum gas and kerosene used for cooking, heating and lighting as well as diesel used for transport; all show signs of leveling off or falling in the first four months of 2017.

These trends maybe come from the demonetisation of large-denomination bank notes in India. They were announced at the start of November as part of the government’s anti-corruption campaign.

 

Crude Oil prices Impact:

 

Rising crude oil and refined fuel prices over the last year are also likely to have constrained the growth in consumption and other fuels.

Observing the retail gasoline prices, we note that they rose by around 10 percent between January 2016 and January 2017. While diesel prices climbed by almost 8 percent. (Ministry of Petroleum and Natural Gas)india

India’s middle class is pretty sensitive to increases in prices & costs, so they are curbing a demand for Oil. Their middle class, urban as well as rural, is emerging very fast.

Nevertheless the recent slowdown in consumption growth for gasoline and other fuels, it is too early to determine if the deceleration is temporary linked to demonetization and price rises or something more lasting.

India as a source of oil demand:

Noteworthy, India has been one of the most important sources of oil demand growth during the cuts. So any extended slowdown in consumption growth, would make the mission of global market harder. The rebalancing will be way more complicated.

 

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Nigeria: Exxon Mobil Oil workers started a strike, dissatisfied by work conditions

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Summary of Today’s Important Economic News:

 

  • Retail sales set to recover in second quarter
  • Fed will keep eye on inflation data
  • Global stock mixed ahead of key U.S. data
  • Oil in track for weekly gains of 3%
  • S. – China trade relations ‘hitting a new high’
  • Gold prices move higher amid U.S. political turmoil

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

Nigeria Exxon Oil : Bad working conditions

The Exxon Mobil Corporation workers in Nigeria started a strike. Being dissatisfied with the current working conditions, and the way they are treated in their daily operations. The idea of starting the strike came from these bad handling of everyday operating routines.

 

Firstly, the Labor union of Nigeria gave so many critics to Nigerian Oil companies. Because of their rude behavior on workers. The use of workers in such disrespectful way lead not only to one, but to a number of strikes in last few months.

“Members of the union started strikes in December, when 150 workers were sacked from their work.”

The chairman of the Lagos zone of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Abel Agarin, said his workers protested for the first time in December. They were hurt by the news that numbers of their cooperates lost jobs. He said 82 of these sacked individuals were PENGASSAN’s workers.

“We want to bring them back to work, and if that is not possible we want a proper severance package for them.” said Agarin

He also led around 50 protesters in the commercial capital, supporting their ideas.

Places where previous strikes took place

PENGASSAN said strikes took place in a few cities and Nigeria states including:  Lagos, Bonny, Akwa Ibom and Port Harcourt.

There weren’t any impacts on Oil production. Strikes are not affecting the real oil output. Said a Exxon Mobile representative.

“It is still to early to say if strikes will affect the Nigerian Oil production. As time goes by, there will probably be some real consequences. “

Regarding a period of late 2016, and strikes which took place then, we can see that the previous strikes did actually impact the outputs. Not only they affected the output, but they also lead to weeks-long shipping delays. Causing the delayed trade.

 

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LME: Friday base metal prices

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Today’s trade was broadly higher for all the base metal prices. The prices saw a little, but positive movement. Yesterday, prices were following a certain rally during the day, but they dipped just before the close.

Copper is currently trading at $5,560 per tonne. It hit highs of over $5,600 per tonne yesterday afternoon, but fell down at the end of a day.

Speaking about the three-month nickel price, it is starting to recover from last week’s falls. It was trading up at $9,355 per tonne this morning.

Regarding Tin prices, they saw a small decline. All  the other base metals recorded minimal price increases.

Copper price aiming higher

Copper is the most ”popular” over all the base metals currently. Firstly the 3-month copper price was up $17 at $5,560 per tonne.
Copper Stocks fell by 7,350 to 329,375 tonnes.
BHP Billiton is continuing the negotiations for possible sale of Cerro Colorado copper mine in Chile.

“We still see uncertainties over whether domestic consumption will support the decline of inventories, and whether the peak consumption season will turn out to be bullish.” (Metal Bulletin)

China’s deleveraging has had great impact on Market enthusiasm. As well as the optimistic trends.

Base metals increase; decline for tin

Firstly, observing the three-month aluminium price, it was up $12 to $1,887 per tonne. Aluminium stocks were down 8,650 tonnes to 1,556,150.
Secondly, the three-month nickel price is trading at $9,355 per tonne. It is calculated the increase of $45. Following, nickel stocks increased for the fourth day in a row, rising 1,224 tonnes to 380,610 tonnes.

Thirdly, zinc price increased $15 per tonne. It is now trading at $2,606 per tonne. Stocks increased 2,050 tonnes to 345,150. Zinc stocks have risen 10,550 tonnes over the last four days.

The three-month lead price rose $4 to $2,181 per tonne. Stocks rose 350 tonnes to 183,150 tonnes.  Tin was the only base metal to see a decline; the three-month price fell $15 to $19,850 per tonne.

Stocks for tin fell 20 tonnes to 2,310 tonnes after two days unchanged.

Currencies & data

Observing the the dollar index, it was unchanged at 99.64.  The Brent crude oil spot price was down 0.40% to $50.61 per barrel.
In equities, the UK FSTE 100 was up 18.07 to 7404.7. The latest data shows that US PPI data was stronger than expected. At 0.5% month-on-month in April against market expectations of 0.2%.


There is a host of US data out today including CPI, retail sales and preliminary University of Michigan consumer sentiment and inflation expectations, while the EU has monthly industrial production data due.

 

LME Asia week; Hong Kong

 

As this year’s LME Asia Week 2017 draws to a close, reporters and editors who were in Hong Kong during this week round up the key themes and topics discussed at the fifth annual event. Metal Bulletin reported about 10 main topics that were discussed in Hong Kong. They wrote about comments, ideas and CEO’s discussions that happened there, and gave a nice brief summary on this closing.

Visit http://www.metalbulletin.com for further info.

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Friday, May 12th on SHFE

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Amid onsets of profit-taking, and a generally bearish sentiment towards demand for the red metal, copper prices on SHFE felt back during Today’s morning trade.

Some traders say:

“Market players took profits after Thursday’s rally, and there is no further stimulus supporting the red metal.”

“The retreat of the whole base metals complex was mainly due to the bearish outlook for the market – weakened consumption and moderate macroeconomics.”

Copper prices movement

 

Firstly, LME copper stocks fell by 2,475 tons to 336,725 tons on Thursday.  It is the fourth running decline within LME-sheds this week. Secondly, SHFE copper prices were lifted on Thursday by reports that the People’s Bank of China is going to release funding on Friday. Which will ease market concerns of tightened Chinese credit.
“PBoC’s attempt to ease short term credit conditions boosted a wave of short-covering, however, the red metal sees limited space to move up further.”
“We still see uncertainties over whether domestic consumption will support the decline of inventories, and whether the peak consumption season will turn out to be bullish.”

“Recent supply disruptions at copper mines were not felt in metal production earlier in the year due to the large supply of copper scrap and seasonally weak demand in the first quarter of the year.” David Lilley (Reuters)
Thirdly, deleveraging in China has adversely affected “enthusiasm and optimism” in the market.  BHP Billiton has started the preparations for a potential sale of its Cerro Colorado copper mine in Chile.

Other base metals

Observing base metal prices, The SHFE September nickel price fell 150 yuan to 75,350 yuan per tonne.  Nickel prices might be under pressure on lower demand and some planned projects starting at the end of May.
Continuing with The SHFE July aluminium price which dipped 30 yuan to 13,710 yuan per tonne.
Later, SHFE June zinc price felt down 290 yuan to 22,090 yuan per tonne.
Speaking about lead, June lead price slid 300 yuan to 15,990 yuan per tonne.
The SHFE September tin price was again flat, staying at same level as yesterday.

 

Currencies & data

Watching today’s market, there are some noteworthy facts out. Firstly the dollar index which  was recently at 99.58, on Friday went down 0.05% as of 03:19 BST.
The Brent crude oil spot price rose 0.06% to 50.79 per barrel while the Texas light sweet crude oil spot price was up 0.38% to $47.85.
The Shanghai Composite dropped 0.24% to 3,073.23.
US PPI data was again better than the forecast, at 0.5% month-on-month in April. Against the market expectations which were at 0.2%.
Later today, we will face the new data from US. Showing CPI, retail sales. Also preliminary University of Michigan consumer sentiment and inflation expectations. Observing EU, it has monthly industrial production data due.

There is a host of US data out today including CPI, retail sales and preliminary University of Michigan consumer sentiment and forecasts for inflation, while the EU has monthly industrial production data due.

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Debts slowing down Rosneft acquisition of Essar Oil; Project worth $12.9 billion

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Real tensions

Rosneft  is currently combating to induce its huge acquisition worth $12.9 billion. Story is about India’s Essar Oil Ltd, the very important purchase for Rosneft company. The ”combat” is happening because some of the Essar’s financiers did not yet endorse the deal. Firstly, the main creditors and financial institutions, along with some state-run banks are the ones delaying the project. They carry approximately $500 million of Essar’s debt.

“Tensions between Rosneft and Essar are running high.”

Secondly, there are currently more than a few sources discussing on this subject. Thirdly, part of Rosneft is controlled by Kremlin officials, and they consider this arrangement substantial for the expansion in Asia’s energy market. They aimed to close this deal before. In period of late 2016. Following, even June as aim for finishing these deals, seems unstable.

 

Acquisition

However, the Rosneft officials expect the acquisition to go through. Some of the sources are saying that Rosneft sent some threatening viewpoints to Essar.  Stating they will pay the minor price, if the odds about these debts extend.

“We are working on obtaining the approvals. We are hopeful that the deal will be completed in the upcoming few weeks.” (Essar spokesman said) (Reuters)

Furthermore, at a Wednesday conference, Pavel Fedorov – Rosneft Chief Financial Officer, said ”I do not expect the purchase to finish by the end of June this year.”

Fourthly, there are six institutions holding up the transaction. They are: IDBI Bank, Punjab National Bank, Syndicate Bank, Indian Overseas Bank, Life Insurance Corp of India and non-bank financier IFCI Ltd.

 

Another industry source

Different point of view:

”Rosneft wanted to finalize this deal in early June. At the St Petersburg Economic Forum, where Indian Prime Minister Narendra Modi will meet Vladimir Putin. Despite being the previous idea, it had now pretty dwindled.

In competition to buy Essar, it was Saudi Aramco against The Russian Rosneft. The two of these are main competitors in global oil exports market.

Deal will give Rosneft a 49 percent stake. The second 49 percent will be divided between Swiss commodities trader Trafigura [TRAFGF.UL] and Russian fund United Capital Partners. The billionaire Ruia brothers will retain a 2 percent stake. VTB bank of Russia advises this transaction.

“The process of closing the deal is in its final stages. And will come to a conclusion soon.”  Spokesman for Trafigura said, while UCP declined to comment. (Reuters)

 

Resolving the Bad Debts

Also, this deal is diligent for Modi’s government. It will clear India’s $150 billion in bad debt.

Noteworthy, Essar Oil India owed about $5.5 billion to almost 30 Indian lenders. Other institutions besides these 6, have approved the transfer.

Observing into these six institutions which are blocking the deal, Syndicate Bank was expected to clear the deal in 10 – 15 days.  Finishing, Indian Overseas Bank source said that they are working on no-objection confirmation.

 

”Debt talks”

In conclusion, debt talks were complicated due to some lenders to whom Essar’s parent still ows money. The parent company is Essar Global Fund Ltd.

“Essar Global Fund planned to use the proceeds to clear half of the group’s debt, which CEO Prashant Ruia has put at about $13.5 billion. “

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Wintershall question retains Libyan oil output, as it tops 800,000 bpd

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Oil production in Libya

 

For the very first time since 2014, Oil production in Libya came to 800,000 bpd. Which makes it the highest level in 3 years. The info is from National Oil Corporation report which came out on Wednesday. The hack question of Wintershall, the German Oil film was stating that Libyan oil production closed at additional 160,000 bpd. The real Libyan output can reach the level amongst 1.1 million and 1.2 million bpd. Only in condition that officials are going to remove political obstructions. 

 

“Libya could produce between 1.1m to 1.2 million bpd. Regarding the period till the end of the year. This will happen only if Oil flows loosely & free. We require Serious National efforts.” (Mustafa Sanalla) He gave a comment on this subject for FT. Mr Sanalla is the chairman of Libya NOC.

 

Despite the output seriously recovering in forthcoming months, it still is at less than 1.6m barrels per day. These levels were normal in 2011, when M. Gaddafi crashed the uprising trends. Armed conflicts and political chaos destroyed the output trends which were smoothly but steadily rising in 2011.

 

OPEC

 

OPEC countries are planning a meeting on May 25th. That is a day when they will decide on whether to prolong output cuts. Knowing this, officials are watching Libyan outputs closely. While most producing countries have brought up the output cuts, Libya is released of these agreements. The inconsistency with Wintershall on the operator’s production will be put on Libyan state. (NOC) Also, the resulting debts have to go back to the levels from 2010. At least. These agreements have shut more than 160,000 b/d.

 

The NOC plans

 

The NOC plans to switch the concession agreement it has with Wintershall. About a production-sharing contracts, aiming to reduce the German company’s production share for more than a half. It considers that Libya, being under pressure from an oil price collapse, already is missing out on revenues of huge value that provide the spine of it’s economy.

UN Presidency Council government in Tripoli negotiated about the agreements on further (un)blocks in oil production. Which gave them a power to discuss on country’s agreements and deals with foreign companies.

 

Wintershall attitude

 

Crude Oil Exports form Zueitina Terminal were not loaded, so the state forced Company  to shutdown the production.

Zueitina Terminal location is in the Central Northern part of Libya on the Mediterranean Sea cost. It consists of offshore loading berths for oil tankers and LPG carriers. The main cargoes handled are crude oil, naphtha, butane and propane.

 

“It would not be an economic exploitation of the petroleum resources . . . to continue production without generating revenues but still being obliged to carry all production-related operational expenses.” (Financial Times)

 

Finishing, The Wintershall did not assign an export distribution since March, due to the previous disputes. (NOC)

“There is no claim over money allegedly owed by Wintershall. Wintershall has always met its obligations towards the Libyan state.”

“Our concession agreements with the state of Libya are still valid and in full force. We are in contact with NOC about a number of issues.”

In conclusion, Libyan Oil outputs have been affected mostly by country’s policies and agitated past which definitely has a deep consequences. As well as on Oil outputs, it affects every aspect of Libyan economy. It needs time to recover, and collaboration with foreign companies will help.

 

 

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SHFE on May 11th; Copper up due to supply concerns; Better market movement

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Shanghai Futures Exchange continued with positive pushes, and copper price went up despite the short pull down at opening time.

Possible supply  restriction gives backup to prices. Also the news about China’s central bank. They will insert some amounts of capital into the open market. These news also renewed confidence and removed fear of the ”market ground”.
Firstly, price of the greatly active SHFE July copper contract rose 130 yuan ($18.82) to 44,920 yuan per tonne. Coming as of 03:17 BST with around 7,690 lots shifting hands. Open interest of the contract was at around 21,530 positions.

 

Over the last 6 days, today will be the first time that China’s central bank will inject a net 20 billion yuan. This amount of capital will go straight into the open market today.

“China’s central bank has resumed capital injections, relieving some recent monetary constraints and boosting financial liquidity. As a result, market sentiment has improved to some extent”  (Fast Markets)

Supply-side disruptions are the ones giving the backup to copper prices these days..

Copper prices increase

 

Secondly, LME copper stocks fell a net 3,625 tonnes to 339,200 tonnes on Wednesday. It is a third successive day of decline within LME-sheds. Thirdly, SHFE copper stocks also fell. While inventories were just down from 1,281 tonnes to 72,930 tonnes on Wednesday.


Copper project in Chile, which was put on hold in March, is cancelled. The company announced these news on Monday. Polish miner KGHM’s Sierra Gorda started this project in the first place.
Following, supply of copper scrap has tightened recently after growing in the first quarter. Meanwhile the breaks at major mines earlier in 2017 are hitting availability of metal. (Based on comments of David Lilley, co-founder of Red Kite Capital Management.)

Other base metals mainly flat; zinc, lead a bit higher

 

Speaking about the SHFE September nickel price, it was flat at 74,700 yuan per tonne. Following,  SHFE July aluminium price was also flat at 13,725 yuan per tonne.
Furthermore, the SHFE June lead price was up 85 yuan to 16,165 yuan per tonne. Finishing, September tin price wasn’t  changed at 139,000 yuan per tonne.

Currencies & data

Observing the dollar index, it was recently at 99.62 on Thursday. Makes it down for 0.03% as of 03:17 BST. Prices of the Brent crude oil spot, rose 0.27% to 50.38 per barrel. The Texas light sweet crude oil spot price was up 0.15% to $47.50.

“Crude oil was buoyed by a fall in US inventories of 5.25 million barrels and front month WTi rallied towards 48.” (Sucden Financial research data)

Looking at the Indices, Shanghai Composite dipped 0.24% to 3,045.3. US import prices for April rose 0.5%. Better than a forecast of 0.2%

 

 

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U.S. Oil Imports Decline; Crude Inventories tumble;

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Crude Reserves

Observing the U.S. crude reserves, they had the biggest one-week fall down since December. It happened last week as imports fell down roughly. Furthermore, inventories of refined products also declined. Helping aliment of oil prices that were down by worries about oversupply.

Crude inventories USOILC=ECI fell 5.2 million barrels in the week to May 5. EIA data showed, rather compared with expectations for a decrease of 1.8 million barrels.  Crude stocks were the lowest since February. Leveling at 522.5 million barrels.

Regarding U.S. crude imports USOICI=ECI, they dropped in previous week by 799,000 barrels per day. Which makes it the largest weekly drop since the middle of February. It came to just 6.9 million bpd. Since the beginning of March, it’s happening for the first time that they have been below 7 million bpd.

Stocks at the Cushing, Oklahoma, conveyance center for U.S. crude futures USOICC=ECI went down to 438,000 barrels.

 

OPEC; Non-OPEC

Speaking about Crude futures, they rose. Based on the data which came after overpassing weeks of pressure.. Mostly over worries that a deal between OPEC and non-OPEC producers about cutting the outputs may not have expected effect. And was not having the desired impact on market prices.

By 11:12 a.m., U.S. crude futures CLc1 were up $1.30, or 2.8 percent, at $47.18 a barrel, and Brent crude LCOc1 rose 2.5 percent, or $1.25, to $49.98 a barrel. (Reuters)

However, U.S. production went up again, and refining runs declined. This made and effect of giving the analysts a pause. They didn’t have to worry about the market’s brisk increase.

 

Forecasts

“The highlited crude oil drawdown number is doubtless supportive. However, it could act something like a shooting star.

The refinery usage-rate has come pretty down. Due to moments after topping out, a couple of weeks ago.” (John Kilduff)

Refinery crude runs USOICR=ECI were down 418,000 bpd. Their utilization rates USOIRU=ECI declined by 1.8 percentage points to 91.5 percent of overall capacity. Happening right after hitting a record 94.1 percent  in the period of three weeks earlier. This is all based on EIA data.

Gasoline stocks USOILG=ECI fell 150,000 barrels.

Distillate stockpiles USOILD=ECI, they also include diesel and heating oil. It has dropped 1.6 million barrels. In comparison with expectations for a 1.0 million-barrel draw.

Notably, U.S. crude production continued to bloom, rising to 9.31 million bpd. While only a week earlier it came from 9.29 million bpd.

 

Outputs still growing

“Growing oil output in the U.S., which achieved its highest level since August 2015, will remain a spiny sharp issue for price bulls.”  Abhishek Kumar was commenting this subject.

He is a senior energy analyst at Interfax Energy’s Global Gas Analytics in London.(Reuters)

U.S. Oil outputs are making a fuss with global Oil supplies and Oil prices. Will OPEC countries succeed in cuts and market rebalance, only time will show.

 

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Main Economic Events & LME Today

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Wednesday, May the 10th deserves to be nominated for one of the most tense days regarding this week. So much going on in financial markets, being pulled and inspired by main political events which are causing a little earthquakes all along the global scene. Will euro come to its 6-month highs lifted by Mario Draghi, and which way will the release of James Comey affect U.S. market… And what is happening with London Metal Excchange Prices today, Let’s see:

 

Main Economic Events Today:

  • China Consumer Price Index(CPI) YoY rose to actual 1.2% (1.1% forecast)
  • ECB President Draghi Speaks
  • U.S. Crude Oil Inventories came to actual -0.930M, while expected was -2.333M
  • New Zealand Interest Rate Decision is at actual 1.75%, same as expected
  • Reserve Bank of NZ Rate Statement (the outcome of factors on interest rates..)

 

Top 5 Things In Wednesday’s Market

inspired by http://www.investing.com

  1. Trump dismissed the FBI director James Comey; It was a very shocking move for Washington (and this really weighs on risk appetite)
  2. Global stocks mixed as Comey’s termination HIT western markets
  3. Oil JUMPS 1% on large inventory draw
  4. Disney set to weigh on Dow, Apple pulls back
  5. Mario Draghi might help to lift euro back to 6-month highs

 

LME Base Metal Prices

Dropped again, across the board of this morning. Coming after short term of recuperation at yesterday’s closing hour.

Following the publication of further unimpressive data, this time from China, copper has fallen below $5,500 per tonne and nickel is back below $9,200 barrier.

While the Chinese CPI for April at 1.2% y-o-y was better than 0.9% in the previous month, its PPI at 6.4% was below the previous figure of 7.6% and the expected 6.7%.

”Copper prices have lost upward momentum since mid-February and more recently they have gained downward momentum.”  (Metal Bulletin)

Copper goes below $5,500/t 

Firstly, three-month copper price fell $24 per tonne to trade recently at $5,488 per tonne. Secondly, copper stocks fell a net 3,625 tonnes to 339,200 tonnes. Also the Inventories started to decline on Monday this week, after they rose more than 100,000 tonnes last week.

Based on the reports of the Chinese trade balance, and their imports, Copper prices came under pressure after Monday. When data showed total copper imports into the nation fell to their lowest since October 2016.

Following, the expected second expansion phase at Polish miner KGHM’s Sierra Gorda copper project in Chile, IS CANCELED, the company announced on Monday.

 

Other base metals  

Speaking about Aluminium prices, the three-month price fell $5.50 to $1,865 per tonne. Stocks fell 7,225 tonnes to 1,570,575 tonnes.

“Aluminium looks a tad better but really needs to stay above $1,860 on the downside.” (FastMarkets)

Observing the Nickel, it fell $55 per tonne to $9,160 per tonne. It is hardly struggling to recover last week’s dropdown of more than $500 per tonne…

“Nickel prices will might be under pressure on weaker demand. With steady nickel trade flows from Indonesia, and some stainless steel plants starting from late May.” Nickel stocks rose 660 tonnes to 381,378 tonnes.

Noteworthy, The three-month tin price fell $55 to $19,660 per tonne, with inventories unchanged at 2,290 tonnes.

Currencies & data  

The Brent crude oil spot price was up 0.36% at $49.13 per barrel. Later, the US dollar index was effectively unchanged at 99.43. In equities, that shoes the UK FTSE 100 was down 7.17 at 7,335.04. But the power of dollar these days is not to be neglected.

Speaking about Europe, French and Italian industrial production both bid better than expectations. Especially the French trade deficit, which fell to a €5.4 billion. It bet the forecast.

US April export and import prices, crude oil stocks and the Federal budget balance are due later today. Mr Donald Trump’s decisions are often shocking for people around him as well as for the global market participants. But we can only watch and testify the outcomes by ourselves.

 

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