Oil near June 2015 high as production cuts tighten market - 26 Dec 2017
Oil near June 2015 high as production cuts tighten market - Oil prices were stable on Tuesday, with Brent crude lingering near 2015 highs on the back of an outlook for healthy demand amid ongoing production cuts led by OPEC and Russia. Trading activity was extremely low on Tuesday due to the ongoing Christmas holiday in many countries. Brent has risen by 47 percent since mid-2017. The Organization of the Petroleum Exporting Countries (OPEC), the Middle East-dominated producer club, and Russia - the world's single biggest oil producer - have been withholding output in order to tighten the market and prop up prices. The agreement to cut started last January and is set to cover all of 2018. Jabar al-Luaibi, oil minister of OPEC-member Iraq, said on Monday there would be a balance between supply and demand by the first quarter of 2018, leading to a boost in oil prices. "During the first quarter of next year there will be more balance between supply and demand, which will reflect positively on improving global oil prices," he said. The production cuts come amid healthy global demand, which many analysts expect to hit 100 million barrels per day (bpd) for the first time at some point next year or in 2019. Potentially keeping a lid on prices is the expected return of the Forties pipeline system in the North Sea, which can supply up to 450,000 bpd of crude underpinning Brent futures. The pipeline shut down earlier in December due to a crack, but operator Ineos said the system was being tested following repairs and full flows should return in early January.
Gold Prices Advance to 3-Week High - Gold prices hit a three-week high on Tuesday, while the dollar showed little movement as trading volumes were expected remain subdued during the holiday season. The dollar was little changed on Tuesday with Wall Street preparing to reopen its doors after the Christmas holiday. Most European stock markets remained closed on Tuesday for Boxing Day and with New Year’s just around the corner, trading was expected to remain thin. Gold is sensitive to moves in the dollar. A stronger dollar makes gold more expensive for holders of foreign currency. The focus stateside will be on the Conference Board’s consumer confidence for December, although the S&P/Case-Shiller housing price index for October, and manufacturing indices from the Richmond and Dallas Fed will also be released.
COPPER - Production at Jiangxi Copper remains normal and the company did not receive any government notice to suspend its operations, sources at China’s largest copper producer told SMM. It was reported by some media outlets that Jiangxi Copper was ordered to stop production for at least a week due to pollution concerns. The discount of spot copper in the Chinese domestic market has continued to go deeper after flipping from a premium in mid-December. In a short period of just 10 days, the discount has now come down to 330-280 yuan/mt, SMM learned. Spot copper discounts have become bigger because sellers were keen to offload their cargoes towards the year-end. Higher prices seen both on the LME and SHFE over the past two weeks also led sellers to be more active in making their materials available. However, downstream customers were rather timid in procurement.
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