Abans Group Commodity World Round Up

02nd Nov - 06th Nov

1.Bank of England boosts bond buying

Nov 5, 2020

The BOE kept its main lending rate at 0.1%, and voted to expand its target stock of U.K. government bond purchases to £895 billion ($1.2 trillion). Last month, the BOE asked British banks about their preparedness for negative interest rates, having revealed in September, that it was exploring the possibility of taking rates below zero if necessary. Since the onset of the coronavirus pandemic in March, the Bank has cut rates twice from 0.75% to 0.1%

Source: CNBC

2.Fed holds interest rates steady near zero

Nov 5, 2020

The US Federal Reserve has held interest rates steady in a range between 0%- 0.25%, and the economy is still well below pre-pandemic levels. Fed officials have been vocal about the need for a more fiscal and possibly additional monetary support, but this week’s meeting yielded no new policy initiatives from the Fed. Chairman, Jerome Powell, noted that he thinks that the Fed still has plenty it can do to help the recovery.

Source: CNBC

3.US NFP grew 638k in Oct, and the unemployment rate dropped to 6.9%

Nov 6, 2020

US Non-farm payroll employment grew 638k in October, above the expectations of 600k. Unemployment dropped sharply to 6.9%, down from 7.9%, and well below the expectations of 7.7%. The labour force participation rate also rose 0.3%, to 61.7%. Average hourly earnings rose just 0.1% MOM, below expectations of 0.2% MOM.

Source: Reuters

4. Energy demand outlook dims as European countries re-enter lockdowns

Nov 5, 2020

The UK joined other European countries, including Germany, France, Spain, Italy, and others, in imposing lockdowns, which will slow down the economic growth and energy demand.  The Covid virus has now infected 49.241 million persons globally, with deaths exceeding 1.242 million. On Tuesday, Trafigura Group has said that the second wave of Covid worldwide could push global oil demand to as low as 88-89 million bpd, down 11%-12% from the last year. The European Union (EU)’s Executive Commission cut its economic forecast, now predicting that the EU won’t see a rebound to pre-virus levels until 2023.

Source: Reuters

5.Iraq’s October oil output rises 6.7%, flouting OPEC+ quota

Nov 6, 2020

Iraq’s oil production in October, including flows from the semi-autonomous Kurdish region, rose 6.7% from September, exceeding the country’s OPEC+ quota, official SOMO data showed on November 5. OPEC’s second largest oil producer pumped 3.842 million b/d in October, above September’s 3.60 million b/d, and its quota of 3.804 million b/d, according to SOMO figures. Iraq is supposed to make 698,000 b/d of catch-up cuts from September through to December, divided into 203,000 b/d in September, and 165,000 b/d in October, November and December.

Source: Hellenic Shipping News

6.Saudis cut oil prices for Asia as virus clouds energy outlook

Nov 5, 2020

State oil producer, Saudi Aramco, has decreased pricing for December shipments of Arab Light crude for Asia, its largest regional market, by 10 cents a barrel, to a 50-cent discount to the benchmark. Saudi Arabia’s pricing decision usually sets the tone for other Middle Eastern suppliers, including Iraq and the United Arab Emirates, the second and third-largest producers in OPEC.

Source: Bloomberg

7.Chile’s copper production fell 0.8% in September to 479,900 mt

Nov 3, 2020

Chile’s copper production fell 0.8% in September, to 479,900 mt. Copper output between January and September was up 0.4%, to 4.26 million mt. BHP's Escondida saw production fall in September, while top miner, Codelco, saw output rise, according to government figures released on Tuesday. Codelco boosted production by 9.6%, year-on-year, to 159,200 mt. The company ratcheted up output by 2.9%, between January and September, despite restrictions put in place to slow the spread of the coronavirus.

Escondida saw production drop by 6%, year-on-year, to 94,100 mt. Between January and September, the mine's output has nonetheless increased 2.4%. Collahuasi reported a 9.4% year-on-year increase in output in September, to 53,400 mt. It has reported a total increase in production of 23.2% year to date.

Source: Reuters

8.Peru reported an 11% decline in copper output in September

Nov 3, 2020

Peru reported an 11% decline in output in September, although power demand by the mining industry suggests that production may have recovered in October. Copper production of 172,000 mt in September compares with 194,000 mt in August, and 204,000 mt a year ago, the mining ministry told reporters on Tuesday

Source: Reuters