Commodities
Gold snaps 3-day rally but still up on week with U.S. debt deal ‘done’
The U.S. debt ceiling deal is done but gold isn’t quite dead yet, as some had been speculating.
Futures of the yellow metal settled down on Friday for the first time in three days. But the drop could not wipe gains over three previous days, leaving gold in the positive for the week.
The front-month gold contract on New York’s Comex settled at $1,969.60 an ounce, down $25.90, or 1.3%, on the day. The benchmark for gold futures hit a two-week high of $2,000.65 in the previous session. For the week, Comex’s front-month gold contract posted a return of 1.3%.
The spot price of gold, which reflects physical trades in bullion and is more closely followed than futures by some traders, was at $1,953.19 by 13:30 ET (17:30 GMT), down $24.33, or 1.2%, as futures trading came to a close. Spot gold hit a one-week high of $1,983.44 on Friday before reversing.
Gold had a positive week despite the dollar rising for a second time in three sessions as forex traders reacted to the Senate passage for the debt ceiling deal that only needs President Joe Biden’s signature next.
U.S. jobs data for May also proved stronger than expected while unemployment itself rose and wage growth slowed, resulting in a split opinion among economists on whether policy makers at the Federal Reserve would hike interest rates again when they meet on June 14.
Commodities
Oil prices wrap up Q1 with strong gains as Russia cuts ease oversupply worries
Investing.com– Oil prices settled higher Thursday to wrap the first quarter with strong gains as bets on lower Russia output eased worries about a global supply surplus.
At 14:30 ET (18:30 GMT), rose 1.6% to settle at $87.48 a barrel, while rose 2.2% to $83.17 a barrel taking its gains for Q1 to about 16%.
Tight supply see oil prices notch strong Q1 gains
Prices were boosted chiefly by a tighter outlook for markets, as Russia, Saudi Arabia and other members of the Organization of Petroleum Exporting Countries kept ongoing production curbs in place. Russia had earlier in March said it will deepen its ongoing production cuts, while fuel supplies in the country also shrank following a series of debilitating attacks by Ukraine on Russian fuel refineries.
Few signs of a deescalation in the Israel-Hamas war, which has raised geopolitical tensions in the oil-rich Middle East region, also underpinned oil prices, as did persistent supply disruptions stemming from Houthi attacks on ships in the Red Sea.
OPEC meets next week
Investors will watch for cues from a meeting next week of the Joint Monitoring Ministerial Committee of producer group the Organisation of Petroleum Exporting Countries amid supply concerns over ongoing geopolitical risks.
That said, the group is unlikely to make any oil output policy changes until a full ministerial gathering in June.
Russia and Saudi Arabia, who lead the group known as OPEC+, extended their output cuts of 2.2 million barrels per day until the end of June.
“While expectations of the group recommending any change to its supply policy are not high, any signs of members not adhering to current production quotas will be seen as a bearish sign,” ANZ Research said in a note.
(Peter Nurse, Ambar Warrick contributed to the article.)
Commodities
Oil prices advance on tighter supply outlook
By Ahmad Ghaddar
LONDON (Reuters) – Oil prices firmed on Thursday, following two consecutive sessions of decline, as investors saw a tighter supply outlook ahead, while the OPEC+ producer alliance was widely expected to stay the course on its current production cuts.
Brent crude futures for May were up 91 cents, or 1.1%, at $87 a barrel while the more actively traded June contract rose 75 cents, or 0.9%, to $86.16 at 1101 GMT. The May contract expires on Thursday.
U.S. West Texas Intermediate (WTI) crude futures for May delivery were up 89 cents, or 1.1%, to $82.24 a barrel.
Both benchmarks were on track to finish higher for a third consecutive month.
In the prior session, oil prices were pressured following last week’s unexpected rise in oil and gasoline inventories, driven by a rise in crude imports and sluggish gasoline demand, according to Energy Information Administration data.
However, the crude stock increase was smaller than the build projected by the American Petroleum Institute, and analysts pointed out that the increase was lower than what would be expected for this time of year.
“We … expect U.S. inventories to rise less than normal in reflection of a global oil market in a slight deficit,” SEB analyst Bjarne Schieldrop said. “This will likely hand support to the price going forward.”
Also providing support to prices were U.S. refinery utilisation rates, which rose 0.9 percentage points last week.
Recent disappointing inflation data affirms the case for the U.S. Federal Reserve to hold off on cutting its short-term interest rate target, a Fed governor said on Wednesday, but he did not rule out trimming rates later in the year.
“The market is converging on a June start to cuts for both the Fed and the European Central Bank,” JPMorgan analysts said in a note. Lower interest rates support oil demand.
Investors will watch for cues from a meeting next week of the Joint Monitoring Ministerial Committee of producer group the Organisation of Petroleum Exporting Countries (OPEC) amid supply concerns over geopolitical risks.
OPEC+ is unlikely to make any oil output policy changes until a full ministerial gathering in June.
“[We] do not see any indications that the recent run-up in prices due to the heightened Russian infrastructure risk will prompt any policy reversal at next week’s JMMC meeting.” RBC analyst Helima Croft said.
“Any serious shift will likely have to wait until the June 1 ministerial meeting, and even then, we believe the group will be very judicious when it comes to unwinding any cuts.”
Commodities
Firmer oil prices expected as demand builds and supply curbs persist: Reuters poll
By Sherin Elizabeth Varghese
(Reuters) – Oil prices will gain some momentum this year as demand picks up and output curbs by the OPEC+ producer group continue to squeeze supply that is already being pressured by military conflicts, a Reuters poll showed on Thursday.
A survey of 46 economists and analysts forecast that would average $82.33 a barrel in 2024, up from the $81.13 consensus projection in February. expectations were raised to $78.09, up from the $76.54 forecast last month.
This was the first upward revision in 2024 consensus forecasts since the October poll.
“We see the oil price rally going further until the summer months,” said Florian Grunberger, senior analyst at data and analytics firm Kpler. “This is due to the geopolitical risk premium and the interests of OPEC+ members, coupled with increasing demand in China.”
Oil prices have added more than 12% in the quarter so far, fuelled by geopolitical tensions in the Middle East, Houthi attacks on Red Sea shipping and recent Ukrainian drone attacks on Russian refineries. [O/R]
On the demand side, the overall consensus was roughly in line with the 1.3 million barrel per day (bpd) rise for 2024 projected by the International Energy Agency.
The IEA’s forecast was far less bullish than that of OPEC, which expects demand growth at 2.25 million bpd this year and said the 2024 and 2025 growth trajectories of India, China and the United States could exceed current expectations.
“Traders have now fully absorbed the implications of the OPEC+ supply cut extensions at a time when demand is proving more robust than expected,” said Matthew Sherwood, lead commodities analyst at the Economist Intelligence Unit.
OPEC+ members led by Saudi Arabia and Russia are unlikely to make any oil output policy changes until a full ministerial gathering in June, three OPEC+ sources told Reuters.
“Convincing OPEC+ members to under-produce as a group to maintain oil prices above a certain level is not going to be easy,” said Suvro Sarkar, energy sector team lead at DBS Bank, pointing to rising surplus capacity and the loss of OPEC+ market share to non-OPEC+ producers such as the United States.
- Forex2 years ago
Forex Today: the dollar is gaining strength amid gloomy sentiment at the start of the Fed’s week
- Forex1 year ago
Unbiased review of Pocket Option broker
- Forex2 years ago
How is the Australian dollar doing today?
- Forex2 years ago
Dollar to pound sterling exchange rate today: Pound plummeted to its lowest since 1985
- Cryptocurrency2 years ago
What happened in the crypto market – current events today
- World1 year ago
Why are modern video games an art form?
- Stock Markets2 years ago
Morgan Stanley: bear market rally to continue
- Economy1 year ago
Crude oil tankers double in price due to EU anti-Russian sanctions