Abans Group Commodity World Round Up

05th Oct - 09th Oct

1. ECB minutes came in more dovish

Oct 08, 2020

ECB policymakers were concerned about the inflation outlook, more than previously expected. Despite upward revisions to the economic projections, the members stressed that there were “key downside risks to the medium-term outlook for price stability, mainly related to the as yet uncertain economic and financial implications of the pandemic”. They also judged that the strength in the euro, being a drag on both financial conditions and inflation, should be monitored closely despite no immediate action.

Source: Reuters

2. Lack of new fiscal support is likely to hinder the recovery in US economy: Fed minutes

Oct 07, 2020

Minutes from the FOMC meeting for 15-16 September showed that the Fed is raising concerns that the lack of new fiscal support is likely to hinder the recovery in the economy. Even policymakers have assumed that the enactment of some additional fiscal policy support from the government is required, and without any such support, economic recovery would likely be slower. Bullion found support from these comments. Federal Reserve officials offered few additional clues to investors on the implementation of the central bank’s new monetary policy guidance, saying it was not an “unconditional commitment” to keeping interest rates low, regardless of the economic conditions.

Source: CNBC

3. India's September gold imports fall 59% to a four-month low

Oct 06, 2020

India's gold imports in September fell 59% from a year earlier, to their lowest level in four months. A drop in prices from a record high, failed to lure buyers, which were postponing purchases, anticipating a bigger drop. India imported around 11 tonnes of gold in September, down from 27 tonnes, a year ago. The silver imports in the month plunged 93%, from a year ago, to 20 tonnes

Source: Reuters

4. OPEC+ improves compliance in September but catch-up cuts remain scant: Platts survey

Oct 07, 2020

As per the published S&P Global Platts survey report, OPEC and its allies sharpened their output quota compliance to 99% in September, led by the Gulf states, but discipline from Russia, and some African producers continued to slip. OPEC’s 13 members produced 24.34 million b/d in September, a fall of 30,000 b/d from August, while its nine partners, including Russia, produced 12.72 million b/d, an addition of 50,000 b/d. Saudi Arabia pumped 8.99 million b/d in September, in line with its quota. Russia produced 9.10 million b/d last month, 110,000 b/d above its quota. In early-March, Russia and OPEC clashed over production cuts, leading to a dramatic oil price war.

Source: S&P Global Platts survey & Argus Media

5. Hedge funds and money managers cut bullish bets on U.S. crude

Oct 09, 2020

The speculator group cut its combined futures and options position in New York and London by 4,619 contracts, to 297,896, in the week up to October 6, the lowest in nearly a month, the U.S. Commodity Futures Trading Commission (CFTC) said. Hedge funds and money managers cut bullish bets on U.S. crude, as rising coronavirus cases around the world weakened the demand outlook, and a rise in OPEC output last month also weighed in upon the market.

Source: CFTC, Reuters

6. Hurricane Delta has shut 1.67 million barrels per day, or 92% of the Gulf's oil output

Oct 09, 2020

The large and powerful Hurricane Delta has shut 1.67 million barrels per day, or 92% of the Gulf's oil output, the most since 2005, when Hurricane Katrina destroyed more than 100 offshore platforms, and hobbled output for months. Meanwhile, producers have halted nearly 62% of the region's natural gas output, or 1.675 billion cubic feet per day. Offshore Gulf of Mexico fields produce about 15% of U.S. crude oil, and 5% of its natural gas production.

Source: Reuters

7. US oil and gas rig count rose in the week upto October 9

Oct 09, 2020

The oil and gas rig count, an early indicator of future output, rose by 3, to 269 in the week up to October 9, as per a Baker Hughes Co. report. The total rig count fell to a record low of 244 rigs during the week ended August 14, according to Baker Hughes data, going back to 1940. This week's rig count was 587 rigs, or 69%, below this time last year. U.S. oil rigs rose by 4, to 193 this week, their highest since early June, while gas rigs fell by 1, to 73, according to Baker Hughes data.

Source: Reuters

8. EIA cuts oil price forecast

Oct 08, 2020

The U.S. Energy Information Administration (EIA) has marginally cut its Brent and West Texas Intermediate (WTI) oil price forecasts for both 2020 and 2021, the organization’s latest Short-Term Energy Outlook (STEO) report has revealed. The EIA now expects the Brent and WTI spot price to average $41.19 per barrel, and $38.76 per barrel this year, respectively. In 2021, the Brent spot price is expected to average $47.07 per barrel, and the WTI spot price is expected to average $44.72 per barrel.

Source: EIA & Yahoo Finance