Home Arrow Commodity News Arrow Escalating trade war, oil supplies

Commodity World Roundup

07th July – 13th July - Escalating trade war, oil supplies & impending Iran sanctions keep commodities markets volatile

Escalating trade war, oil supplies

1. U.S. oil exports to India soar ahead of sanctions on Iran

July 13, 2018

U.S. crude oil exports to India hit a record in June, and so far this year’s oil exports are almost double last year’s total as the Asian nation’s refiners move to replace supplies from Iran and Venezuela in a win for the Trump administration.

Source: Reuters

2. World oil supply may increase

July 13, 2018

Rising global oil supply, driven by crude giants Saudi Arabia and Russia, may come under pressure as key producers face disruptions, the International Energy Agency said on Thursday. The IEA welcomed in its July report last month's agreement between the OPEC and Russia to open the taps in order to bring prices down from multi-year highs. But it pointed to supply disruptions in Libya after a string of attacks on infrastructure. It also highlighted continuing unrest in Venezuela and a drop in Iranian exports after President Donald Trump announced he was pulling the United States out of the landmark nuclear deal reached in 2015.

Source: ABS-CBN

3. India cuts Iranian oil imports by 16% in June from May to follow U.S. sanctions

July 12, 2018

Indian refiners cut imports of Iranian oil last month as they started weaning their plants off crude from the country to avoid sanctions by the United States that are set to take effect in November. India’s monthly oil imports from Iran declined to 5,92,800 barrels per day (bpd) in June, down 16% from May, according to data from industry and shipping sources. The United States in May said it would reimpose the sanctions after withdrawing from a 2015 agreement with Iran, Russia, China, France, Germany, and Britain, where Tehran agreed to curb its nuclear activities in return for the lifting of earlier sanctions.

Source: Business Line, Reuters

4. Crude oil benchmark Brent sees biggest one-day fall in two years

July 12, 2018

Global benchmark Brent crude oil had its biggest one-day drop in two years on Wednesday as escalating U.S.-China trade tensions threatened to hurt oil demand, and news that Libya would reopen its ports raised expectations of growing supply. Brent crude LCOc1 fell $5.46, or 6.9 percent, to settle at $73.40 a barrel. The decline was the largest one-day move on a percentage basis since Feb. 9, 2016. U.S. crude CLc1 fell $3.73, or 5 percent, to $70.38 a barrel.

Source: Reuters

5. OPEC warns of trade war 'risks' for oil market

July 12, 2018

The OPEC cartel today warned that global trade tensions could have a negative impact on the oil market by pushing down demand for crude. In its monthly report, the Organization of the Petroleum Exporting Countries said buoyant world trade in 2017 and 2018 had helped impulse economic growth, and therefore the demand for crude. But this may change further down the line, OPEC said, as the United States and China fired the latest shots in their escalating trade war.

Source: Economic Times

6. Uncertain times for shares of metal companies as Dr copper flashes red

July 12, 2018

Investors in metal stocks would be rooting for the US and China to kiss and make up. Shares of non-ferrous metal companies have declined on the back of falling metal prices and an uncertain outlook. A tightening of interest rates in developed markets and the strength of the dollar are factors that reduce the attractiveness of commodities as an asset class. But this was known. The escalating trade war between the two big economies has the potential to hurt China’s economic growth. The US is hoping that a threat to its economic growth will bring China to the negotiating table, to give the US more access to China’s market. But so far, public muscle-flexing has been the stock response.

Source: Live Mint

7. Gold ETF’s see outflows of Rs. 150 crore

July 11, 2018

Gold exchange-traded funds continued to lose steam with investors pulling out almost Rs. 150 crore from the instrument in the April-June quarter, in favour of equities. Assets under management fell 12% to Rs. 4,567 crore in June. Gold ETFs have seen outflows over the last five years. After the rise in prices since 2005, they made new highs in 2011-12 and then corrected sharply. Since then, they have traded in a range of $1,100-$1,400/oz.

Source: Business Line

8. Already Asia’s worst-performing currency, the Indian rupee could slide FURTHER

July 10, 2018

The Indian rupee has been on a slide for months, and there seems to be no end to it. On June 28, the currency fell to Rs. 69.01 against the US dollar, its weakest level till date. It is likely to slip further to Rs. 70 over the next few weeks as macro-economic concerns persist, including higher crude oil prices, trade deficit, weak investor sentiment, and capital outflows. This year, Asia’s worst-performing currency has already lost over 8% of its value.

Source: Qz.com

9. U.S. oil sellers may look to India as China tariff war escalates

July 09, 2018

American oil producers may find a new friend in India as they brace for a trade war with China that could curb U.S. shipments. Refiners in China were the top buyers of American crude oil in May, and have been regular importers since the U.S. revived domestic output and exports in recent years. But sales may slow amid a growing trade war between Beijing and the Trump Administration.

Source: Bloomberg

10. Rupee fall hits India’s largest brass parts market

July 07, 2018

The recent devaluation of the rupee against US dollar has taken its toll on India’s largest brass parts market in Jamnagar. During June alone the industry has witnessed a 25-30% loss in new business as it is dependent on imported brass scrap. Moreover, production cost of the pending orders has also gone up which has added to the manufacturers’ woes.

Source: Financial Express