Commodities
Oil prices set for weekly loss on China demand fears
By Robert Harvey and Enes Tunagur
LONDON (Reuters) -Oil prices were steady on Friday, heading for a weekly loss, as investors mulled waning Chinese demand and a possible slowing of the U.S. Federal Reserve’s interest rate cut path.
futures dropped 30 cents, or 0.41%, to $72.26 a barrel by 1238 GMT. U.S. West Texas Intermediate crude futures were down 24 cents, or 0.35%, at $68.46.
For the week, Brent is set to fall 2% while WTI is set to decline nearly 3%.
China’s oil refiners in October processed 4.6% less crude than a year earlier because of plant closures and reduced operating rates at smaller independent refiners, data from the National Bureau of Statistics showed on Friday.
The country’s factory output growth slowed last month and demand woes in its property sector showed few signs of abating, adding to investors’ concerns over the economic health of the world’s largest crude importer.
“China served a timely reminder about the true state of its oil sector. The country’s refinery throughput declined for the seventh successive month in October,” PVM analyst Tamas Varga said.
Speaking on Thursday, Fed chair Jerome Powell said the U.S. central bank did not need to rush to lower interest rates. Lower interest rates typically spur economic growth, aiding fuel demand.
Oil prices also fell this week as major forecasters indicated slowing global demand growth.
“Global oil demand is getting weaker,” said International Energy Agency (IEA) Executive Director Fatih Birol on Friday at the COP29 summit.
“We have been seeing this for some time and this is mainly driven by the slowing Chinese economic growth and the increasing penetration of electric cars around the world.”
The IEA forecasts global oil supply to exceed demand by more than 1 million bpd in 2025 even if cuts remain in place from OPEC+.
OPEC meanwhile cut its forecast for global oil demand growth for this year and 2025, highlighting weakness in China, India and other regions.
Providing a floor to the price declines, U.S. gasoline stocks fell by 4.4 million barrels last week to the lowest since November 2022, the Energy Information Administration said, outweighing a 2.1 million barrel stockbuild.
“Without the weekly statistics on US oil inventories the major oil contracts would have probably settled lower (on Thursday). Gasoline supported the whole complex,” PVM’s Varga added.
SHANGHAI (Reuters) – China will reduce import tariffs on ethane and certain recycled and aluminium raw materials from next year, the government said on Saturday.
The Ministry of Finance announced adjustments to various import tariff categories, effective Jan. 1, aimed at increasing imports of high-quality products, expanding domestic demand and promoting high-level opening-up, it said in a statement.
Provisional import tariffs below the most-favoured-nation rates will be applied to 935 items, the ministry said. Import tariffs will be reduced on ethane and certain recycled copper and aluminium raw materials to advance green and low-carbon development.
Tariffs will rise on commodities including molasses and sugar-containing pre-mixed powders will increase but be reduced on items such as cyclic olefin polymers, ethylene-vinyl alcohol copolymers and automatic transmissions for special-purpose vehicles such as fire trucks and repair vehicles.
Import tariffs will also be reduced on items such as sodium zirconium cyclosilicate, viral vectors for CAR-T tumour therapy, and nickel-titanium alloy wires for surgical implants.
The China-Maldives Free Trade Agreement will come into effect on Jan. 1, with tariff reduction implementations, the ministry said.
Investing.com– Oil prices settled higher Friday after data showed weekly inventories fell more than expected.
At 2:30 p.m. ET (19:30 GMT), rose 1.2% to $74.17 a barrel, and settled higher at $70.60 a barrel.
Trading volumes were thin ahead of the new year’s start as many institutional investors and traders typically take time off during the holiday season. Additionally, year-end profit-taking and portfolio rebalancing reduce trading activity.
US crude inventories fall more than expected
The U.S. Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy, reported Friday crude stockpiles for week ended Dec. 20 fell 4.2M barrels, compared with expectations for a decline of just 700,000 barrels.
This drawdown indicates a tightening supply in the U.S. crude oil market, which has implications for global oil prices. Following the API’s report, oil prices had edged higher, supported by hopes for additional fiscal stimulus in China and the reported decline in U.S. crude inventories.
Gasoline inventories rose by 1.6 million barrels last week, while distillate inventories—which include diesel and heating oil—fell by about 1.7 million barrels.
China stimulus hopes persist
Chinese authorities have decided to issue a record-breaking 3 trillion yuan ($411 billion) in special treasury bonds next year, in an intensified fiscal effort to stimulate a struggling economy, Reuters reported on Tuesday.
Moreover, China is allowing local officials to broaden investments with key government bonds and simplifying approvals to better utilize public funding for economic growth, a government document showed on Wednesday.
On Thursday, the World Bank revised its economic growth forecast for China upward for 2024 and 2025 but cautioned that weak household and business confidence, combined with challenges in the property sector, would continue to hinder growth in the coming year.
The outlook for oil demand hinges on the hope that China, the world’s largest oil importer, can revive its economy, especially as there are concerns about a potential oversupply due to expected increases in production from non-OPEC countries.
Ayushman Ojha contributed to this report.
Investing.com– Gold prices fell Friday, ending the week lower as Treasury yields rose following the U.S. Federal Reserve’s hawkish tilt
was 0.7 at $2,614.40 per ounce, while expiring in February edged 0.9% lower to $2,630.36 an ounce.
Trading in gold typically sees thin volumes and subdued prices toward the year-end as many institutional traders and market participants close their books ahead of the holiday season.
Additionally, at year-end, economic data releases and major policy decisions are typically fewer, reducing catalysts for significant price volatility.
The yellow metal was set to edge up 0.3% for the week after losing more than 1% in the previous one. A strong dollar after the Fed’s hawkish shift last week has continued to put downward pressure on bullion.
Gold slips amid pressure from rising yields
The was slightly lower on Friday, pairing overnight gains, though continued to hover near a two-year high it touched last week. Still, Treasury yields were sharply higher, pressuring the yellow metal.
A weaker dollar often boosts on gold prices as it makes the yellow metal more attractive to buyers using other currencies.
Gold prices had fallen sharply after the Fed policy meeting indicated only two more rate cuts in 2025, against previous expectations of four.
Higher interest rates put downward pressure on gold making it more attractive compared to interest-bearing assets like bonds
Other precious metals were lower on Friday. were down 3.6% to $919.90 an ounce, while were down 1.5% $29.935 an ounce.
Copper gains on concentrate shortage news, strong dollar caps gains
Among industrial metals, copper prices were higher after a Reuters report showed China’s leading copper smelters have set lower processing charge guidance for the first quarter of 2025 compared to this quarter, reflecting an ongoing shortage of copper concentrates.
At a meeting in Shanghai, representatives from the China Smelters Purchase Team agreed on new rates for copper concentrate treatment and refining charges, setting them at $25 per metric ton and 2.5 cents per pound, down 28.6% from the fourth-quarter guidance of $35 per ton and 3.5 cents per pound.
The red metal failed to fully capitalize on this news, as a strong dollar weighed.
Benchmark on the London Metal Exchange rose 0.4% to $8,995.00 a ton, while February edged down 0.1% to $4.1242 a pound.
Ayushman Ojha contributed to this report.
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