Abans Group Commodity World Round Up

24th Aug – 28th Aug

1. US Natural Gas prices hit a 9-month high on supportive weather

Aug 28, 2020

A warmer than usual weather in the US has helped lift natural gas prices by nearly 75% since late June, when they hit their lowest level since 1995. Natural Gas is used as power plant fuel. The extension of summer heat has translated into the burning of more gas to feed higher electricity consumption for air conditioning. According to the EIA's latest Short-Term Energy Outlook, natural gas’ share of electricity generation would rise to 40% this year, from 37%, in 2019.

Source: Yahoo Finance

2. US Crude Oil and Natural Gas Production disrupted due to Hurricane Laura

Aug 26, 2020

Around 1.6 million barrels per day of offshore crude oil production has been halted, as crews on platforms in the Gulf of Mexico have been evacuated inland. This amounts to about 84% of U.S. offshore crude oil production in the Gulf of Mexico. Additionally, producers have halted about 1.65 billion cubic feet per day of natural gas production from the Gulf of Mexico.

Source: Forbes

3. Copper inventory at LME warehouses fell to a 14-year low

Aug 26, 2020

Copper prices pushed towards a two-year high, reached earlier this month, on Wednesday, as inventories in the London Metal Exchange (LME) system fell to the lowest in 14 years. Copper inventories in LME-registered warehouses were at 92,025 tonnes, which is the lowest since 2006, and down from more than 280,000 tonnes in May.

Source: Reuters

4. US and China reaffirm commitment to Phase 1 trade deal in phone call

Aug 25, 2020

Top US and Chinese trade officials reaffirmed their commitment to a Phase 1 trade deal, which has seen China lagging on its obligations to buy American goods, giving a boost to financial markets. The pledge was made in a telephone call between US Trade Representative Robert Lighthizer, US Treasury Secretary Steven Mnuchin, and Chinese Vice Premier Liu He - their first formal dialogue since early May - amid concerns that the deal could be on shaky ground, as U.S.-China ties weaken.

Source: Reuters

5. Fed can allow inflation to run above its 2% target for some time

Aug 27, 2020

Federal Reserve Chairman, Jerome Powell, in his remarks delivered on Thursday for the annual symposium traditionally held in Jackson Hole, outlined the revision to the central bank’s policy framework. Powell said on Thursday that the central bank would adopt an average inflation target, meaning rates are likely to stay low, even if inflation rises a bit in the future. The Fed Chairperson has said that it can allow inflation to run above its 2% target for some time.

Source: Bloomberg

6. China’s oil imports from Iran continued in July

Aug 27, 2020

Official Chinese data showed this week that China imported 120,000 barrels per day (bpd) of oil from Iran in July, as Beijing returns to reporting crude imports from the Islamic Republic, after reporting no such imports for June. China’s oil imports from Iran, averaged 77,000 bpd, between January and July this year, nine times lower than the figures China had reported before the U.S. re-imposed sanctions on Iran’s oil industry and exports.

Source: Oilprice.com

7. US labor market recovery is slowing

Aug 27, 2020

The number of Americans filing new claims for unemployment benefits hovered around the 1 million last week, suggesting that the labour market recovery was stalling due to the COVID-19 pandemic. Initial claims for state unemployment benefits fell 98,000, to a seasonally adjusted 1.006 million, for the week ended August 22, the Labor Department said. Economists polled by Reuters had forecasted 1.0 million applications in the latest week.

Source: Reuters

8. US second-quarter GDP plunged by worst-ever 31.7%

Aug 27, 2020

A second reading of the US economy in the second quarter reflected the biggest quarterly plunge in activity on record, though the Covid-induced plummet wasn’t as bad as initially estimated. Gross Domestic Product (GDP) from April to June, tanked 31.7%, against a market forecast of a 32.9% drop, on an annualized basis. That was revised down from the 32.9% initial estimate of the damage, the pandemic-fueled lockdowns had on the economy in the second quarter.

Source: CNBC