Oil prices edge up on reports of Saudi supply cuts, but details murky - 11 Jan 2017

Commodity Intraday Tips

Gold prices gained with the focus on policymaker remarks this week in the U.S. led by the next U.S. president on Wednesday. Gold for February delivery on the Comex division of the New York Mercantile Exchange edged up 0.11% to $1,186.75 a troy ounce.Overnight, gold prices rallied to a six-week high on Tuesday, amid jitters ahead of President-elect Donald Trump’s first news conference since his election victory on Wednesday. U.S. President-elect Donald Trump is to hold a press conference at 11:00 AM on Wednesday, which investors will be watching for any hints about the possible direction of economic policy.Gold has been well-supported in recent sessions after minutes from the Federal Reserve’s December meeting unsettled investors’ expectations about the pace of future interest rate hikes.


Peru’s government said January 10 the country’s copper output is expected to increase 20% in 2017, wenhua.com reported. Peru’s copper production is expected to be 2.60-2.70 million tonnes in 2017, higher than the 2.20 million tonnes estimated in 2016.  The country’s copper output hit an all-time high of 2.15 million tonnes in the first eleven months of 2016, surging 42% from the same period of 2015. This is due mainly to surge in output at MMG’s Las Bambas copper mine and expansion by Freeport-McMoRan Inc at its Cerro Verde mine.LME copper is expected to move at USD 5,640-5,750/mt during Asian trading hours on Wednesday and SHFE 1703 copper will move at RMB 46,000-47,000/mt. In China’s domestic market, spot copper should trade at premiums of RMB 0-80/mt on Wednesday. The US dollar index rallied after hitting a two-day low on Tuesday, and is expected to remain range-bound.


Oil edged up on Wednesday, lifted by reports of Saudi supply cuts to Asia, but prices were prevented from rising further over a lack of detail of these reductions and because of signs of rising supplies from other producers. Traders said that the price rises were a result of reports that Saudi Arabia, the world's top oil exporter, was telling some Asian customers that it will curb crude supplies slightly from contracted volumes in February, although Reuters was not able to confirm any details of the reductions.There were also doubts that the overall cuts would go deep enough to rebalance a market suffering from oversupply for the past two years. Both Brent and WTI futures are down around 6 percent since the start of the year. "Traders continued to fret about rising U.S. supply and compliance by OPEC to agreed-upon production cuts," ANZ bank said. 

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