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16th June – 22nd June - OPEC meeting for 22nd June & Trade War between US & China dictate market sentiments

OPEC meeting for 22nd June & Trade War between US & China dictate market sentiments

1. The OPEC meets on Friday to decide on the output policy

June 22, 2018

The OPEC meets on Friday to decide on the output policy amid calls from top consumers such as the United States, China and India to cool down oil prices and support the world economy by producing more crude. OPEC edged closer on Thursday toward raising oil output, with Iran softening its opposition to an increase and Saudi Arabia warning of supply shortages and price rallies if output remained stable. An output rise of about 1 million barrels per day (bpd) or around 1% of global supply was emerging as a consensus for the group and its allies, OPEC sources told Reuters, adding that Iran could agree under certain conditions.

Source: Economic Times

2. Air India divestment will be reviewed at a later date

June 22, 2018

Air India divestment will be reviewed at a later date, but they haven’t specified a timeline. The repercussions of postponing the sale could be severe, entailing very high costs. Crude oil prices are elevated and that’s going to hurt badly, Brent Crude prices are hovering around $75 a barrel and this is burdensome for airlines. Jet Airways (India) Ltd posted a huge loss at the EBITDA (Earnings before interest, tax, depreciation and amortization) level itself. Simply put, with crude oil prices firm, the stress on Air India’s profit will most likely escalate.

Source: Livemint

3. OPEC may increase output by 300,000 barrels a day up to 1.5 million barrels a day (mbpd).

June 22, 2018

Oil ministers will huddle together in Vienna to decide whether to spike up supplies after a 2016 decision to curb output to end a global oil glut. This has set the markets fluttering — expectations have ranged between an increase of 300,000 barrels a day up to 1.5 million barrels a day (mbpd).

Source: Financial Express

4. Zinc Option based on Future prices are launched on MCX

June 21, 2018

Multi Commodity Exchange of India (MCX), the country’s largest commodity derivatives exchange, on Thursday began trading in zinc options contract with zinc futures as the underlying asset. Currently, the options contracts expiring in the months of July, August and September have been offered for trading.

Source: Times of India

5. Indian bond market is staring at a cash glut in the system

June 21, 2018

The Indian bond market is staring at a cash glut in the system as the Reserve Bank of India’s latest Open Market Operation (OMO) announcement helped government bonds gain side-stepping a raft of macro-economic uncertainties. Advance tax payments have already weighed in on the system with liquidity deficit extending to Rs 32,000 crores. Cash shortage leads to rise in bond rates, which adds to higher federal borrowing costs; If RBI conducts more such money market operations to infuse liquidity in the system, it will shield any sudden bout of cash outgo in the banking system mitigating chances of a yield surge.

Source: Economic Times

6. OPEC MEET IN FOCUS: IRAN SIGNALS COMPROMISE FOR MODEST RISE IN OUTPUT

June 21, 2018

Iran signalled on Wednesday it could compromise on a small increase in OPEC oil output when the group meets this week, as Saudi Arabia scrambled to convince fellow members of the need for a larger rise in output. The OPEC meets on Friday to decide the output policy amid calls from major consumers such as the United States and China to cool down oil prices and support the global economy by producing more crude.

Source: Reuters

7. India’s cotton shipments to China could grow five-fold

June 21, 2018

India’s cotton shipments to China could grow five-fold to 5 million bales (850,000 tonnes) in the next crop year as exporters rack up orders amid a trade war that is forcing the world’s top consumer to look for other sources of supply. China’s decision to impose a 25 percent import tax from July 6 on American farm commodities, including on cotton, in retaliation for tariffs enacted by the administration of U.S. President Donald Trump will allow India to grab a bigger share of the Chinese market.

Source: Reuters

8. Gold demand remains sluggish in India

June 20, 2018

Gold demand remains sluggish in India as investors do not see any immediate geopolitical trigger for prices to rise even though the trade war between the US and China has intensified over the past few days.

Source: Economic Times

9. Crude dropped due to an escalating trade war

June 19, 2018

Crude dropped as an escalating trade war between the world’s two largest economies imperils energy demand just as OPEC and allied oil producers move toward boosting output.

Source: Bloomberg

10. OPEC was unlikely to reach a deal: Iran

June 19, 2018

Iran said on Tuesday that OPEC was unlikely to reach a deal on oil output this week, setting the stage for a clash with Saudi Arabia and Russia, which are pushing to raise output steeply from July to meet the growing global demand.

Source: Reuters

11. India's energy requirement is expected to grow at a CAGR of 4.6 per cent

June 19, 2018

India's energy requirement is expected to grow at a CAGR of 4.6 per cent through 2030, making it the fastest growing energy consumer in the world. Over the past two decades, the Indian oil and gas industry has had a major transformation triggered by liberalization and increasing demand for oil and gas products.

Source: mydigitalfc

12. China’s threat to impose duties on U.S. oil imports will hit business

June 19, 2018

China’s threat to impose duties on U.S. oil imports will hit business that has soared in the last two years, and which is now worth almost $1 billion per month. In an escalating spat over the United States’ trade deficit with most of its major trading partners, including China, U.S. President Donald Trump said last week he was pushing ahead with hefty tariffs on $50 billion of Chinese imports, starting on July 6.

Source: Reuters

13. Hedge Funds turning bullish on Crude Oil

June 19, 2018

After two months of cutting bets on rising prices, hedge funds are feeling optimistic again as OPEC prepares to meet. Whether that optimism is warranted remains an open question. Falling output from Iran and Venezuela briefly had analysts touting the possibility of $100-a-barrel oil ahead, and hedge funds boosted wagers on a price rebound in the week ending on Tuesday. Since then, though, a push by Saudi Arabia and Russia for output increases ahead of next Friday’s OPEC meeting has injected an uncertain new element into the picture, pushing futures in London down 4 percent over two days.

Source: Economic, Times

14. India’s exports grew 20.18 percent to $28.86 billion in May

June 16, 2018

In a major boost to the government, India’s exports grew 20.18 percent to $28.86 billion in May, recording the highest number in six months. Even though exports outpaced imports, higher oil import bill wiped away the benefits of a contraction in gold imports. Based on the available data for April-May 2018, the current account deficit may widen to US$15-16 billion or around 2.4% of GDP in the ongoing quarter, from US$14 billion in Q1 FY 2018, with higher commodity prices counteracting the likely contraction in gold imports.

Source: Financial Express