Oil Prices Stable On Healthy Demand But Oversupply Looms - 15 Mar 2018

Commodity Intraday Tips
Gold settle flat on an expectation of higher interest rates, but downside seen limited by safe-haven buying after the sudden dismissal of U.S. Secretary of State Rex Tillerson -  Gold on MCX settled up 0.09% at 30405 held steady in the range while sentiments improved after the release of mixed U.S. economic reports and as investors remained cautious after the sudden firing of U.S. Secretary of State Rex Tillerson. From the data point the U.S. Commerce Department reported on Wednesday that retail sales fell 0.1% in February, compared to expectations for a 0.3% rise Rising inflation could add pressure on the Fed to speed up its rate rises, which could lift the dollar, though strangle the stock market. Gold, in turn, although negatively affected by higher interest rates, could attract hedging demand against too-hot inflation. The impact of trade policy has also served as a backdrop to recent trading. Tillerson will be replaced by CIA Director Mike Pompeo. Investors also remained cautious after Trump announced plans to impose tariffs on up to $60 billion of Chinese imports, specifically targeting the technology and telecommunications sectors.

Copper prices gained as support seen from expectations of stronger demand in top consumer China - Copper on MCX settled up 0.73% at 454.25 as support seen from expectations of stronger demand in top consumer China. Prices were supported by news of industrial action at First Quantum’s Cobre Panama project, “which has reduced the level of work being performed on the project”. The workers in the largest union at Antofagasta Plc’s Los Pelambres copper mine rejected an offer for a new labour contract, paving the way for striking action. Workers and the company would still have to go through a meditation process with the government to reach a second deal. Strong demand from the growing electric economy could be undermined by supply disruptions if wage contracts can’t be negotiated across the major producer. Also China’s lower copper imports in February weakened the sentiment on copper.

Oil Prices Stable On Healthy Demand But Oversupply Looms - Oil prices were mostly flat on Thursday morning in Asia, held steady by healthy global demand but capped by the ongoing surge in U.S. production.Prices were supported by healthy demand. The Organization of the Petroleum Exporting Countries (OPEC) said on Wednesday that oil consumption was expected to grow by 1.62 million barrels per day (bpd) in 2018. But overshadowing this market optimism is the relentless increase in U.S. crude output, which hit another record last week by climbing to 10.38 million bpd, up by more than 23% since mid-2016. Commercial crude rose by 5 million barrels, at 430.93 million barrels. U.S. crude production has already topped that of top exporter Saudi Arabia, and by late 2018 is expected to surpass 11 million bpd, overtaking top producer Russia.

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