Abans Group Commodity World Round Up

07th Sept – 11th Sept

1. Copper prices to find support from Chinese demand

Sept 11, 2020

Chinese demand dropped 15% in the first quarter, due to COVID-19. However, there has been a strong recovery in the second quarter. Strong Chinese copper demand can be seen in its imports, which rose to a record high of 762,210 tonnes in July. Imports were up 38%, from a year earlier in the first eight months of 2020, at 4.27 million tonnes. Following a positive demand outlook, stocks of copper in LME warehouses are at 75,550 tonnes, which are at their lowest levels since 2005.

Source: Reuters

2. US EIA cuts 2020 world oil demand growth forecast

Sept 9, 2020

The U.S. Energy Information Administration (EIA), on Wednesday, cut its 2020 world oil demand growth forecast by 210,000 barrels per day, to 8.32 million bpd. In its monthly forecast, the agency cut its oil demand growth estimate for 2021, by 490,000 bpd, to 6.53 million bpd.

Source: EIA, and Reuters

3. EIA lifts 2020 forecasts for oil and natural-gas prices and U.S. production

Sept 9, 2020

The U.S. Energy Information Administration (EIA) raised its 2020 forecasts for West Texas Intermediate, Brent crude oil prices, and U.S. crude oil production. The EIA pegged its 2020 WTI oil price forecast at $38.99 a barrel, up 1.3%, from its August forecast. It also lifted its Brent crude price forecast by 1.2%, to $41.90, for the year 2020. The agency expects U.S. crude production of 11.38 million barrels a day this year, up 1.1% from the previous view. The EIA also lifted its forecast for natural gas prices to $2.49 per million British thermal units, up 5.8%, from the previous view.

Source: EIA, MarketWatch

4. China’s oil imports were up by 13% in August from the same month last year

Sept 7, 2020

China's crude oil imports in August climbed 13 per cent from a year earlier, buoyed by hefty orders placed earlier this year, when global oil prices collapsed. Imports were 47.48 million tonnes last month, which is equivalent to 11.18 million barrels per day (bpd). This was well below the monthly record of 12.94 million bpd set in June this year, but easily beat last year's overall monthly average of 10.11 million bpd.

Source: Reuters

5. U.S. rig count falls as oil market uncertainty continues

Sept 11, 2020

Baker Hughes reported on Friday that the number of oil rigs in the United States fell by 1, to 180. The total number of active oil and gas rigs decreased for the week by 2, with oil rigs falling by 1, and gas rigs falling by 1. Total oil and gas rigs in the United States are now down by 632, compared to this time, in the last year.

Source: Reuters

6. Gold prices are up after the ECB meeting

Sept 10, 2020

The dollar fell due to further increased gains in the euro, after the European Central Bank’s latest policy announcement, and a stalemate in the U.S. Congress over pandemic relief funding; this is lending weight to the rise in gold. Gold prices registered a high of $1975.20 per ounce this week, after the ECB meeting on Thursday.

Source: Reuters

7. Disappointing US employment numbers are providing support to gold prices

Sept 10, 2020

In the U.S., as per the economic news on Thursday, the number of Americans who applied for unemployment benefits through state and federal programs in the week ended September 5, was unchanged at a seasonally adjusted 884,000, the Labour Department said. Still, continuing jobless claims, the number of people already receiving benefits rose by 93,000, to a seasonally adjusted 13.39 million in the seven days ended August 29. Gold found support from disappointing employment numbers.

Source: Bloomberg

8. China plans strategic boost to oil reserves

Sept 10, 2020

China’s next five-year plan, beginning in 2021, will call for an increase to its mammoth state reserves of crude. A Bloomberg News reported in April that the government had set a target of holding oil stockpiles, equivalent to 90 days of net imports, which could eventually be expanded to as much as 180 days, when including commercial reserves.

Source: Bloomberg