Abans Group Commodity World Round Up

07 Jun- 11 Jun

1. OPEC Raised Oil Production By 400,000 Bpd In May

Jun 10, 2021

OPEC’s crude oil production rose by 390,000 barrels per day (BPD) to 25.46 million BPD in May 2021. The largest monthly increases in oil production came from top producer Saudi Arabia, followed by production hikes in Iran and Venezuela. Libya, also raised its crude oil production in May compared to April, when output was lower due to several days of force majeure at one of the oil export terminals. Saudi Arabia boosted its production by 345,000 BPD to 8.466 million BPD in May.

Source: Bloomberg

2. OPEC Keeps Forecast of Oil Demand for Second Half of 2021 Unchanged

Jun 11, 2021

As per the monthly report from OPEC, Total global oil demand is expected to average 90.6 mb/d. By 2021, world oil demand growth is kept unchanged at 6.0 mb/d, with total oil demand standing at 96.58 mb/d. OECD demand is revised slightly lower on an annualized basis, mainly reflecting lower-than-expected data from OECD Americas and Europe in 1Q21. However, initial data for April in both regions, as well as positive mobility developments given easing restriction measures and border openings, encouraged an upward revision to 2Q21 data. This offset most of the 1Q21 downward revision. In the non-OECD, oil demand was revised slightly higher, mainly due to positive 2Q21 data from the Middle East.

Source: Reuters

3. US crude oil production is expected to fall by 230,000 barrels per day (BPD) in 2021 to 11.08 million BPD

Jun 08, 2021

US crude oil production is expected to fall by 230,000 barrels per day (BPD) in 2021 to 11.08 million BPD. It is a smaller decline than its forecast last month for a drop of 290,000 BPD. The recent price rise has prompted some US producers to increase drilling activity. In 2022, production is expected to average 11.8 million BPD, up from a forecast average of 11.1 million BPD in 2021. The EIA said it expects US petroleum and other liquid fuel consumption to rise 1.49 million BPD to 19.61 million BPD in 2021, compared with a previous forecast for a rise of 1.39 million BPD. US gasoline consumption is expected to average 8.7 million BPD in 2021 and 9 million BPD in 2022. Overall in 2022, US demand is forecast to rise by 1 million BPD to 20.61 million BPD, compared to the EIA's previous forecast for a rise of 1.02 million earlier.

Source: Reuters

4. Central banks’ interest in gold remains strong – WGC survey

Jun 10, 2021

Central banks continue to show strong interest in gold, with roughly the same number of them likely to buy the precious metal this year, said the World Gold Council (WGC). In its 2021 Central Bank Gold Reserves Survey, 52 per cent of the 56 central banks that responded believe central banks will add more gold over the next 12 months. The percentage of respondents that would increase their gold holdings climbed to 21 per cent versus 20 per cent last year, WGC said. WGC said emerging markets’ central banks' rate gold’s investment-related aspects much more highly than their counterparts in advanced economies.

Source: Bloomberg

5. Top miners leave money on the table amid copper price rally

Jun 10, 2021

The recovery since the depth of the pandemic lit a fire under copper stocks, but not all miners have been able to take full advantage of the rally. Many big names have seen output drop this year or showed tepid growth. Big names like BHP (reduced workforce in Chile), Southern Copper (lower grades), Antofagasta (reduced workforce) and Rio Tinto missed an opportunity, while for Norilsk (suspended operations), MMG (lower grades) and Vale (restrictions and maintenance) the start of the year was nothing short of dismal.

Source: Minining.com

6. ECB projects brighter outlook but keeps "steady hand" on stimulus

Jun 10, 2021

The European Central Bank raised its growth and inflation projections but pledged a steady flow of stimulus over the summer, fearing that a retreat now would accelerate a concerning rise in borrowing costs and choke off the recovery. ECB President Christine Lagarde said, "We believe that the steady hand is actually the right response,". She was stressing that tapering, exiting or transitioning away from the 1.85 trillion euro Pandemic Emergency Purchase Programme had not even been discussed. Lagarde acknowledged some debate around the decision but said there was broad majority support for "significantly higher" bond buys. Maintaining its long-standing guidance, the ECB also said PEPP would last until March 2022 and that it reserved the right to buy less than its purchase quota or increase it as needed to "maintain favourable financing conditions".

Source: Reuters

7. Yellen says higher interest rates would be 'plus' for US Fed

Jun 07, 2021

Treasury Secretary Janet Yellen said that President Joe Biden’s $4 trillion spending plan would be good for the US, even if it contributes to rising inflation and results in higher interest rates. "If we ended up with a slightly higher interest rate environment it would actually be a plus for society's point of view and the Fed's point of view," Yellen said in an interview with the outlet on Sunday. "We want them to go back to" a normal interest rate environment, "and if this helps a little bit to alleviate things then that's not a bad thing- that's a good thing," Yellen added.

Source: Bloomberg

8. China trade: imports grow at the fastest pace in a decade as trade surge continues

Jun 07, 2021

China’s imports and exports grew again in May, but both missed expectations, data released on Monday showed. Imports grew by 51.1 per cent in May from a year earlier to US$218.4 billion, up from the 43.1 per cent growth in April, according to data from the National Bureau of Statistics. This was below the median result of a survey of analysts conducted by Bloomberg, which predicted 54.5 per cent growth. This was the eighth consecutive period of import growth and the fastest import growth since January 2011, although the fact that imports fell by 16.7 per cent in May last year due to the impact of the coronavirus is a factor in the size of the increase this year.

Source: South China Morning Post