Abans Group Commodity World Round Up

14 Jun- 18 Jun

1. Fed shifts Interest rate outlook

Jun 16, 2021

The Federal Reserve on Wednesday held interest rates at near-zero but optimism over the progression of the U.S. economic recovery spurred more Fed officials to pencil in rate hikes by the end of 2023. The Fed also reiterated for now its commitment to its asset purchase program, which is absorbing about $120 billion a month in assets. The Fed statement reiterated that for now the central bank will continue to purchase at least $120 billion a month in agency mortgage-backed securities and U.S. Treasuries as part of its quantitative easing program

Source: Bloomberg

2. OPEC Secretary Urges Member Countries To Continue Oil Investments

Jun 17, 2021

OPEC Secretary General Mohammad Barkindo urged all member countries and the international industry to continue to invest in all sources of energy, including oil and gas, in particular using technology to mitigate against emission. He also said that the energy transition should not crowd out any source of energy as all energy sources of today will be required for the foreseeable future. Transition is moving away from greenhouse gas emissions in the exploration, production, transportation, and consumption of fuels across the board to more sustainable sources of energy that would address the emission issue

Source: Oil Price .com

3. Oil prices to hit $100 per barrel amid looming crisis: Energy expert

Jun 15, 2021

The world’s top commodity traders have forecast a return to $100-a-barrel oil, as investment in new supplies slows down before demand has peaked and before green alternatives can take up the slack. Executives from Vitol, Glencore and Trafigura and Goldman Sachs said that $100 crude was a real possibility, with prices already reaching their highest level in two years this week as Brent crude moved above $73 a barrel. The prediction comes at a time when concern about inflation is rising and many commodities, such as copper, have already reached record highs, boosted by supply shortfalls as the economic recovery gathers pace.

Source: Financial Times

4. U.S. motor vehicle travel jumped

Jun 17, 2021

U.S. motorists drove 55% more miles in April over the levels seen in 2020 as more Americans return to offices and resume trips. The Federal Highway Administration said motorists drove 256.5 billion miles in April, up 90.6 billion miles over April 2020. In seasonally adjusted figures, travel in April was down 4.7%, or 12.3 billion miles, versus March 2021, the agency said. U.S. airline passenger travel remains down about 25% over pre-pandemic levels, but has risen sharply in recent months.

Source: Reuters

5. ECB should not extend stimulus flexibility to older tools: Weidmann

Jun 18, 2021

The European Central Bank can hopefully reduce emergency stimulus soon and should not transfer the extraordinary flexibility of its crisis-fighting measures to its more standard tools, German central bank chief Jens Weidmann told German newspaper Handelsblatt. Some policymakers are already making the case for a discussion in September on how and when to phase out the 1.85 trillion euro ($2.2 trillion) Pandemic Emergency Purchase Programme as the bloc is quickly recovering.

Source: Reuters

6. UK Inflation’s Jump Above BOE Goal

Jun 16, 2021

U.K. inflation surged unexpectedly past the Bank of England’s target for the first time in almost two years, lifting the pound and adding to speculation about when monetary policy could be tightened. Consumer prices rose 2.1% from a year earlier, the highest since July 2019, the Office for National Statistics said Wednesday. Economists and the BOE had expected an increase of 1.8% while Core inflation jumped to 2%, the most since August 2018.

Source: Bloomberg

7. Japan Inflation Gains for the First Time Since March 2020

Jun 17, 2021

Japan’s inflation edged into positive territory for the first time in 14 months as rising commodity costs fed higher gasoline prices at the pump, according to data that comes before a central bank policy decision later today. Consumer prices excluding fresh food ticked up 0.1% compared with a year earlier, lifted by a 20% jump in gas prices, the ministry of internal affairs reported on Friday. Economists had predicted flat prices overall. The BOJ forecasts inflation staying below its 2% target for the foreseeable future, meaning its main stimulus will probably stay in place for years to come.

Source: Bloomberg

8. China would release its national reserves of the metal to stabilise prices

Jun 16, 2021

China will release its national reserves of copper, aluminium and zinc in batches in the near term to nonferrous processing and manufacturing firms via public bidding, the National Food and Strategic Reserves Administration said without giving a specific number for each metal. Copper prices fell by fears of a rise in supplies on the news that top consumer China would release its national reserves.

Source: Reuters