Commodities

Oil set for first weekly gain in three weeks

Published

1 month ago

December 13, 2024

By Ahmad Ghaddar

LONDON (Reuters) – Oil prices rose more than 1% Friday, heading for their first weekly rise since the end of November, as additional sanctions on Russia ratcheted up supply worries, while a surplus outlook weighed on markets.

futures rose 34 cents, or 0.5%, to $73.75 a barrel by 1308 GMT, while U.S. West Texas Intermediate crude was up 32 cents, also 0.5%, at $70.34.

Both contracts are on track for a weekly gain of more than 3% as concerns about supply disruption caused by tighter EU sanctions on Russia and potential similar moves by the U.S., and hopes that Chinese stimulus measures announced this week could lift demand in the world’s No. 2 oil consumer support prices.

“The EU’s ramping up of sanctions on Russia is still causing bullish reverberations and as the US is making noises in which it might join in, the idea of less Russian oil on the water will remain fresh,” PVM oil analyst John Evans said.

European Union ambassadors agreed a 15th package of sanctions on Russia this week over its war against Ukraine, targeting its shadow tanker fleet.

Additionally, Britain, France and Germany told the United Nations Security Council that they are ready – if necessary – to trigger a so-called “snap back” of all international sanctions on Iran to prevent the country from acquiring a nuclear weapon.

Meanwhile, Chinese data this week showed crude imports grew annually for the first time in seven months in November, driven by lower prices and stockpiling.

“We have seen a bit of a recovery in refinery margins since the September lows, but don’t think it’s anything to justify the November crude import volumes,” said Warren Patterson, ING’s head of commodities research.

Crude imports by China, the world’s largest importer, are set to stay elevated into early 2025 as refiners opt to lift more supply from top exporter Saudi Arabia, drawn by lower prices, while independent refiners rush to use their quota.

The International Energy Agency increased its forecast for 2025 global oil demand growth to 1.1 million barrels per day (bpd) from 990,000 bpd last month, thanks to China’s recent stimulus measures, it said in its monthly oil market report.

However, it forecast a surplus for next year, when non-OPEC+ nations are set to boost supply by about 1.5 million bpd, driven by Argentina, Brazil, Canada, Guyana and the United States.

Investors are also betting that the Fed will cut borrowing costs next week and follow up next year with further reductions, after economic data showed weekly claims for unemployment insurance unexpectedly rose.

Commodities

Oil prices slip slightly lower; caution ahead of Trump inauguration

Published

9 hours ago

January 20, 2025

Investing.com– Oil prices slipped slightly lower Monday, as optimism over tighter supplies, amid stricter US sanctions against Russia, was offset by caution before President-elect Donald Trump’s inauguration.

At 07:15 ET (12:15 GMT), expiring in March dropped 0.2% to $80.61 a barrel, while fell 0.1% to $77.31 a barrel.

Crude prices retreated slightly after recording four weeks of strong gains, as traders awaited news from Washington, with volumes limited by the US holiday.

Trump inauguration in focus for tariffs, energy cues

Markets were now focused squarely on Trump’s inauguration later on Monday, with the President-elect having promised increased trade tariffs on top oil importer China.

Trump also reiterated plans to increase US energy production during a Sunday rally, promising to lift regulations on the domestic energy sector.

Higher US production- which already stood close to record highs of over 13 million barrels per day in 2024- could potentially offset the impact of recent sanctions against Russia by keeping global crude supplies underpinned.

Trump has also vowed to dole out expansionary policies during his term- a trend that could underpin demand in the world’s biggest oil importer. US oil demand was a mixed bag in recent months. While cold weather did spur increased demand for heating fuels, it disrupted travel across large swathes of the country during the travel-heavy year-end holidays.

“There is a fair amount of uncertainty across markets coming into this week given the inauguration of President Trump and the raft of executive orders he reportedly is planning to sign. This combined with it being a US holiday today, means that some market participants may have decided to take some risk off the table,” analysts at ING said, in a note.

Oil markets weigh demand, supply outlook

Traders were speculating over a somewhat mixed outlook for oil supply and demand. While recent US sanctions on Russia could limit global supplies, this could be offset by demand remaining soft, especially if Trump imposes steep trade duties on China.

China is the world’s biggest oil importer, and has seen a steady decline in its appetite for crude amid persistent economic weakness.

“Output data from China on Friday shows that refineries increased the amount of they processed by 1.3% year-on-year in December,” said ING. “However, for full-year 2024, refinery activity still fell by 3.6% YoY, reflecting weaker domestic demand. Output and trade numbers suggest that apparent oil demand in December came in at a little more than 13.9m b/d, down from 14m b/d the previous month, but up 0.6% YoY.”

The People’s Bank of China kept its benchmark loan prime rate unchanged, as widely expected, on Monday.

Beijing is expected to ramp up its stimulus measures in the face of trade headwinds under Trump. Recent data also showed China’s economy improved after Beijing doled out its most aggressive round of stimulus measures in late-2024.

Recent gains in oil have also been curtailed by easing tensions in the Middle East, as Hamas and Israel exchanged hostages and prisoners over the weekend under a recently signed ceasefire, which also saw traders attach a smaller risk premium to oil.

(Ambar Warrick contributed to this article.)

Commodities

Oil prices hold steady as market awaits Trump announcements

Published

9 hours ago

January 20, 2025

By Arunima Kumar

(Reuters) -Oil prices were steady on Monday as traders awaited U.S. President-elect Donald Trump’s inauguration in the hope of some clarity on his policy agenda, including plans to end the Russia-Ukraine war.

futures dropped 37 cents, or 0.46%, to $80.42 a barrel by 1004 GMT. U.S. West Texas Intermediate (WTI) crude futures were down 24 cents, or 0.31%, at $77.64.

The more active U.S. WTI crude March contract fell 36 cents to $77.03.

The focus is what executive orders Donald Trump will sign over the next 24 hours, said UBS analyst Giovanni Staunovo.

Charalampos Pissouros at broker XM, meanwhile, said that oil prices were trading a little lower on expectations that Trump will relax energy-related sanctions against Russia in exchange for an end to the war in Ukraine

Trump, who will be inaugurated later on Monday, is widely expected to make a flurry of policy announcements in the first hours of his second term, including an end to a moratorium on U.S. liquefied (LNG) export licences as part of a wider strategy to strengthen the economy.

The Brent and WTI benchmarks advanced more than 1% last week for a fourth consecutive weekly gain after the Biden administration sanctioned more than 100 tankers and two Russian oil producers.

That led to a scramble by top buyers China and India for prompt oil cargoes and a rush for ship supply as dealers of Russian and Iranian oil sought unsanctioned tankers for oil shipment.

While the new sanctions could cut supply from Russia by nearly 1 million barrels per day (bpd), recent price gains could be short lived depending on Trump’s actions, ANZ analysts said in a client note.

Trump has promised to help to end the Russia-Ukraine war quickly, which could involve relaxing some curbs to enable an accord, they said.

Easing tension in the Middle East also kept a lid on oil prices. Hamas and Israel exchanged hostages and prisoners on Sunday that marked the first day of a ceasefire after 15 months of war.

Commodities

Copper market sees half chance of 10% US tariff by first quarter-end, Goldman says

Published

9 hours ago

January 20, 2025

(Reuters) – Goldman Sachs on Monday said the market is pricing in odds of about 50% that there will be a 10% U.S. tariff on the metal by the end of the first quarter of this year.

Analysts at the U.S. investment bank said in a client note that the estimate is similar to their own 50% subjective probability of a 10% effective tariff on copper by year-end.

Three-month copper on the London Metal Exchange eased 0.3% to $9,167 a metric ton as at 0706 GMT after reaching a one-month peak last week. [MET/L]

President-elect Donald Trump returns to the White House later in the global day with an inauguration speech which traders will parse for policies to be enacted on day one. Trump has talked of tariffs of as much as 10% on global imports as well as 60% on Chinese goods and a 25% import surcharge on Canadian and Mexican products.

Goldman also noted that the oil market is pricing in a nearly 40% chance of a 25% U.S. tariff on Canadian goods including oil, versus the bank’s 15% subjective probability of a 25% effective tariff by the end of the year.

futures traded around $80.69 a barrel, while the more active U.S. West Texas Intermediate crude April contract was steady at $77.36. [O/R]

The investment bank assigned a 10% chance to a 10% effective tariff on gold being introduced within the next 12 months. It said bullion’s status as a financial asset makes it likely to be exempt from broad-based tariffs.

prices were up 0.3% at $2,708.77 per ounce while U.S. were little changed at $2,749.70. [GOL/]

The amount of gold stocks in COMEX-approved warehouses has jumped by one-third in the past six weeks as market players sought deliveries to hedge against the possibility of tariffs.