Commodities
Saudi Arabia lowers oil prices for key markets
Saudi Arabia has cut crude oil prices for customers in Asia (its core market). The price of the main Arab Light grade has dropped 25 cents from its May price and is now $2.55 above the regional benchmark, the agency said. Refiners and traders surveyed by Bloomberg had expected a larger reduction of 45 cents.
In contrast, Saudi Aramco’s state-owned Saudi Aramco increased all rates for European customers, while most prices for the U.S. were unchanged, Bloomberg reported. Asia accounts for about 60% of Saudi Aramco’s crude exports – much of it produced under long-term contracts whose prices are reviewed every month. Saudi Arabia’s biggest Asian customers are China, Japan, South Korea and India.
Saudi Arabia is the largest oil exporter in the world. Since May 1, the country has promised to reduce its production by 500,000 barrels per day until the end of the year. At the same time Russia extended until the end of the year its production reduction by 500,000 barrels per day; other members of OPEC + have also promised to reduce production. After that, the price of Brent, which had fallen to its lowest level since December 2021 (below $71 per barrel), went up again and at its peak exceeded $87 per barrel. However, since mid-April the July futures began to fall in price again, and by May 3 their value had fallen below $72 per barrel.
The price of oil is now influenced by investor concerns about the state of the U.S. economy and the global economy, the tense situation in the U.S. banking market after the collapse of the third bank in two months, as well as the weak statistics on production in China, Bloomberg said. OPEC+ will assess the decline in oil prices, which may be short-lived, Deputy Prime Minister Alexander Novak said on May 3.
July Brent futures stand at $74.22 a barrel, up 2.37% from the closing price.
Earlier, we reported that Brent oil fell below $72 a barrel for the first time since March 20.
Investing.com — Gold has recently performed as expected leading up to the U.S. election, but Societe Generale (OTC:) analysts suggest the precious metal may take a breather in the near term.
Despite this, they see robust long-term drivers that reinforce the yellow metal’s unique role in financial markets.
“Gold is the ultimate ‘unknown unknown’ commodity,” Societe Generale stated, explaining that its primary value lies in its role as a hedge against unforeseen and unpredictable risks.
Unlike most commodities, gold’s market dynamics are not influenced by typical supply and demand fundamentals.
“It is broadly speaking neither seasonal in its supply nor in its demand and is often considered the least commodity-like commodity market,” the firm stated.
According to Societe Generale, gold’s limited industrial use sets it apart from other resources, emphasizing its status as a store of value with a unique monetary role.
“It is this monetary role that makes gold an alternative to fiat currencies and a stable store of value in unstable times,” Societe Generale explained.
The bank highlighted several drivers supporting gold’s current bullish momentum: persistent fiscal profligacy in the U.S., potential reversals in interest rate policy, the weaponization of the U.S. dollar in sanctions enforcement, and escalating geopolitical risks.
They note that investor sentiment has shifted significantly, with money managers, central banks, and ETFs turning bullish on gold simultaneously over the last quarter.
Societe Generale emphasized that “sentiment on gold has converged with few sellers in sight,” solidifying its appeal as a hedge in uncertain times.
While a temporary pause in gold’s rally may be imminent, the firm believes its fundamental strengths and role as a safeguard against “unknown unknowns” ensure its continued relevance in portfolios.
WASHINGTON (Reuters) – President-elect Donald Trump said on Saturday that oil and gas industry executive Chris Wright, a staunch defender of fossil fuel use, would be his pick to lead the Department of Energy.
Wright is the founder and CEO of Liberty Energy, an oilfield services firm based in Denver. He is expected to support Trump’s plan to maximize production of oil and gas and to seek ways to boost generation of electricity, demand for which is rising for the first time in decades.
He is also likely to share Trump’s opposition to global cooperation on fighting climate change. Wright has called climate change activists alarmist and has likened efforts by Democrats to combat global warming to Soviet-style communism.
“There is no climate crisis, and we’re not in the midst of an energy transition, either,” Wright said in a video posted to his LinkedIn profile last year.
Wright, who does not have any political experience, has written extensively on the need for more fossil fuel production to lift people out of poverty.
He has stood out among oil and gas executives for his freewheeling style, and describes himself as a tech nerd.
Wright made a media splash in 2019 when he drank fracking fluid on camera to demonstrate it was not dangerous.
U.S. oil output hit the highest level any country has ever produced under Biden, and it is uncertain how much Wright and the incoming administration could boost that.
Most drilling decisions are driven by private companies working on land not owned by the federal government.
The Department of Energy handles U.S. energy diplomacy, administers the Strategic Petroleum Reserve – which Trump has said he wants to replenish – and runs grant and loan programs to advance energy technologies, such as the Loan Programs Office.
The secretary also oversees the aging U.S. nuclear weapons complex, nuclear energy waste disposal, and 17 national labs.
If confirmed by the Senate, Wright will replace Jennifer Granholm, a supporter of electric vehicles, emerging energy sources like geothermal power and a backer of carbon-free wind, solar and nuclear energy.
Wright will also likely be involved in permitting of electricity transmission and the expansion of nuclear power, an energy source that is popular with both Republicans and Democrats but which is expensive and complicated to permit.
Power demand in the United States is surging for the first time in two decades amid growth in artificial intelligence, electric vehicles and cryptocurrencies.
Investing.com — Low crude oil inventories are setting the stage for potential price increases in 2025, according to a recent note from Wells Fargo (NYSE:).
Despite a flat performance this year, the bank said prices could rebound as global supply remains tight and economic conditions improve.
Wells Fargo points out that while crude oil prices have seen minimal change in 2024—just 2% lower since the year began—this has largely been due to “a host of uncertainties on global demand growth and weak economic conditions” that have kept prices under pressure.
However, tight supply conditions mean that crude oil inventories are staying low, which, historically, has supported price increases.
The bank explains, “When global inventories are low or moving lower, oil prices have tended to move higher.” Wells Fargo highlights that this trend of declining inventories is evident in recent months, suggesting that oil prices could soon rise in response.
Looking forward, Wells Fargo projects that an improved macroeconomic environment and increased demand growth in regions such as China could further bolster oil prices.
“Efforts by China to stabilize its property sector could lead to better overall demand growth for commodities and oil,” the note says. As demand picks up globally, Wells Fargo expects crude oil prices to respond accordingly.
For 2025, the bank forecasts West Texas Intermediate (WTI) crude to reach $85–$95 per barrel and to range from $90 to $100 per barrel.
With these expectations, Wells Fargo remains favorable on the Energy sector within commodities, anticipating that low inventories combined with global economic recovery will underpin a positive outlook for crude oil prices in the coming year.
Forex2 years agoForex Today: the dollar is gaining strength amid gloomy sentiment at the start of the Fed’s week
- 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
- Forex2 years ago
Unbiased review of Pocket Option broker
- Cryptocurrency2 years ago
What happened in the crypto market – current events today
- World2 years ago
Why are modern video games an art form?
- Commodities2 years ago
Copper continues to fall in price on expectations of lower demand in China
- Forex2 years ago
The dollar is down again against major world currencies
