Abans Group Commodity World Round Up

10th Aug – 14th Aug

1. President Putin says Russia has registered a vaccine for Covid-19

Aug 11, 2020

President Putin announced that Russia has registered the first vaccine for Covid-19; it has received approvals in less than 2 months of human testing, and was developed by Gamaleya institute. President Vladimir Putin has said that Russia cleared the world’s first Covid-19 vaccine for use, and hopes to begin mass inoculation soon, even before clinical testing has finished.

Source: Bloomberg

2. US initial jobless claims better than expected, and the CPI index rose

Aug 13, 2020

United States initial jobless claims came in better than expected at 963k, versus the forecasted 1,120k, and the previous 1,191k.

US Consumer Price Inflation came in higher than expected in July, posting a 0.6% month-on-month gains for both the headline and core CPI, versus 0.3%, and 0.2% respective consensus expectations. This leaves the respective year-on-year inflation rates at 1%, and 1.6%.

Source: Bloomberg

3. US PPI also rose last month

Aug 12, 2020

The Producer Price Index (PPI) in the US, for final demand, rose from -0.2% in June, to 0.6% in July, the data published by the US Bureau of Labour Statistics showed on Tuesday. On a yearly basis, the PPI edged up to -0.4%, and came in higher than the market expectations of -0.7%. Further details of the publication revealed that the annual core PPI, which excludes volatile food and energy prices, climbed to 0.3%, and surpassed the analysts' estimate of 0%.

Source: Reuters

4. Natural Gas prices rallied on increased demand, and an inventory drop

Aug 14, 2020

Natural Gas prices closed at $2.341, with an increase of 7.29% on Friday. The EIA reported a small increase of 58 Bcf in working gas in storage. The market had anticipated a larger build. Also, bullish, for natural gas, on Friday were forecasts for hot weather, and reports of increased LNG exports. Front-month Natural Gas futures on Friday hit their highest, since the end of last year, on data that air conditioning usage is expected to increase, as people are trying to cope with the heat wave. This will increase the demand for natural gas.

Source: Reuters

5. Crude oil inventory dropped by 4.5 million barrels against a forecasted drop of 3.2 million barrels

Aug 12, 2020

According to official government data from the EIA, crude oil inventory dropped by 4.5 million barrels in the week ending August 7th; this reading came in lower than the market anticipation of a 3.2 million barrels decline. Crude oil prices continue to rise after this report.

Source: Reuters

6. OPEC expects a drop in oil demand by 9.1 million bpd this year compared to 2019

Aug 12, 2020

In its closely-watched Monthly Oil Market Report (MOMR) published on Wednesday, OPEC expects global oil demand to reach 90.6 million bpd—a drop of 9.1 million bpd, compared to 2019. The expected decline in demand is around 100,000 bpd larger than what OPEC had forecasted last month. In its monthly report, OPEC now forecasts that the global economy will shrink by 4.0 percent this year, more than the 3.7 percent economic drop expected in the July forecast, due to the additional negative impact of the pandemic.

Source: Reuters

7. UK’s unemployment rate for April-June 2020 stands at 3.9%, and the UK enters into a recession

Aug 11, 2020

UK’s unemployment figures released this week, saw the largest rise in unemployment since May 2009, with 220,000 people losing their jobs. The unemployment figure remained at 3.9%, but there are growing concerns that we may see this significantly rise, once the furlough scheme starts to unwind.

The U.K officially entered into a recession this morning. The U.K economy shrank by 20.4% in Quarter 2 (April-June) of 2020, which, following on from a decline of 2.2%, from January to March, means that we have officially entered into a recession.

Source: Bloomberg

8. China’s inflation rose, and retail sales remained weak in July’20, and industrial growth remained steady

Aug 14, 2020

Retail sales in China, for July, remained weak, with a contraction of 1.1 percent, and figures were below expectations of a 0.1 percent growth, as per the consensus forecast of a Bloomberg poll. Retail sales had dipped by 1.8 percent in June, and 2.8 percent in May.

China’s Consumer Price Inflation, for the month of July 2020, rose to 2.7%, on a YoY basis, against an expected 2.6%, and a previous print of 2.5%, for the month of June. Inflation rose on the back of higher food prices.

Industrial production in China grew by 4.8 percent in July, from a year earlier, emphasizing its role as the main engine of economic growth.

Source: Bloomberg