Drone attack on Saudi plants may lift oil prices by $5-7/bbl; IOC, HPCL, BPCL, GAIL in focus - Commodity Trading

The Abqaiq and Khurais oil processing plants have capacities of 7 million barrels per day (mbpd) and 1 mbpd, respectively

Crude oil prices are expected to see a sharp spike of $5-7 per barrel on September 16 when the global markets open for trade, reacting to the major drone attacks on two Saudi Aramco oil facilities in eastern Saudi Arabia, Emkay said. The drone attacks caused a major fire at both facilities -- Abqaiq and Khurais -- in early hours of September 14.

The report said that the Houthi rebels have officially claimed responsibility for the attack and threatened more attacks unless Saudi and its allies stop their offensive against them. The Houthis are allegedly backed by Iran. The Abqaiq and Khurais oil processing plants have capacities of 7 million barrels per day (mbpd) and 1 mbpd, respectively. Supplies have been disrupted, with two citing a 5 mbpd impact, Emkay reported quoting unnamed sources. 5 mbpd is over half of Saudi Arabia’s current production of 9.8 mbpd and 5 percent of global oil supplies. "A 5 percent hit on global oil supplies is significant and oil prices are expected to spike once markets open on September 16," Emkay Global said. Historically, prices have jumped over 10 percent after such major events. Hence, a $5-7 per barrel jump can happen. Although it may stabilise if the affected production is brought back quickly, the brokerage added. Hence, the above price calculation suggests that Brent crude futures, the international benchmark for oil prices, could increase to $65-67 per barrel from September 13’s close of $60.22 a barrel. This is expected to impact not only oil retailers but also global equity markets including India -- which imports more than 85 percent of its oil requirement -- as 5 percent of global oil supply disruption is big, experts feel.

Gold drops for fourth session as improved risk appetite weighs - Commodity Trading

Spot gold was down 0.6% at $1,490.48 per ounce, as of 0421 GMT, after hitting its lowest since Aug. 13 at $1,486 earlier in the session.

Gold prices fell for a fourth straight session on Tuesday as risk appetite remained buoyed by better-than-expected economic data, which suggested that the global economy was perhaps not doing as badly as previously assumed. Spot gold was down 0.6% at $1,490.48 per ounce, as of 0421 GMT, after hitting its lowest since Aug. 13 at $1,486 earlier in the session. Bullion prices have shed nearly 5% since hitting a more than 6-year peak of $1,557 on Sept. 4. U.S. gold futures fell 0.8% to $1,498.50 per ounce.

Data released earlier in the day showed China's August consumer price index (CPI) rose 2.8% year-on-year, above expectations for 2.6%, while the producer price index (PPI), a key barometer of corporate profitability, contracted less than expected. "A lot has already been factored in about the effect of the trade war on China. Better-than-expected numbers might suggest that the impact might not be as deep as many thought," said Michael McCarthy, chief market strategist at CMC Markets. "Globally we are seeing a shift back towards growth assets and that's coming at the cost of the safe-havens." The trade war between China and the United States has upset markets globally since it began more than a year ago, fanning concerns of a global economic slowdown. However, markets took heart from their decision to hold talks in early October in Washington. Meanwhile, U.S. Treasury Secretary Steven Mnuchin said on Monday he did not see the threat of a recession as President Donald Trump seeks to revive trade negotiations, adding that he expected a positive year ahead for the U.S. economy. "If prices hold at $1,490, we might see gold steadying. However, gold's short-term trend is downward. If it breaks through $1,480, it could fall to $1,425," McCarthy said. Investors now await the European Central Bank's meeting on Thursday for clues on monetary policy easing. The ECB is all but certain to introduce a package of monetary easing and stimulus measures, but markets doubt it will opt for a massive quantitative easing. The U.S. Federal Reserve is also widely expected to cut interest rates next week. "A resumption in U.S.-China trade talks along with accommodative monetary policy by global central banks has renewed risk appetite for the current term," Phillip Futures said in a note. Meanwhile, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.82% to 882.42 tonnes on Monday. Among other precious metals, platinum dropped 1.4% to $933 per ounce, while palladium slipped to $1,541.99. Silver fell 0.8% to $17.82 per ounce.

Commodity Trading in Chennai - Indian Business Trade Inc

Base Metals: Nickel, copper, zinc futures rise on firm spot cues:

Nickel prices went up by 0.74 per cent to Rs 1,279.60 per kg in futures trade on Wednesday as speculators raised their bets on spot demand. 
On the Multi Commodity Exchange, nickel for delivery in September gained Rs 9.40, or 0.74 per cent, to Rs 1,279.60 per kg in a business turnover of 8,754 lots.
Increase in domestic demand from alloy-makers and firmness in base metals at the spot market mainly influenced nickel prices here, analysts said. 

Copper
Copper prices edged higher by 0.59 per cent to Rs 443.10 per kg in futures trade on Wednesday as participants raised bets, tracking positive global cues. 
On the Multi Commodity Exchange, copper contracts for September delivery rose by Rs 2.60, or 0.59 per cent, to Rs 443.10 per kg in a business turnover of 3,138 lots. 
A firm trend overseas and pick-up in demand at the spot market mainly led to the rise in copper prices, analysts said. 

Zinc 

Zinc prices rose 0.5 per cent to Rs 182.10 per kg in futures trade on Wednesday as speculators built up fresh positions taking positive cues from the spot market. 
On the Multi Commodity Exchange, zinc for delivery in September traded 90 paise, or 0.5 per cent higher at Rs 182.10 per kg in a business turnover of 3,181 lots. 
Marketmen said fresh positions built up by participants due to pick-up in spot market led to rise in zinc futures. 

Lead 
Lead prices were trading higher by 0.16 per cent to Rs 153.95 per kg in futures trade on Wednesday as participants built up fresh positions driven by pick-up in demand at the spot market. 

On the Multi Commodity Exchange, lead for delivery in September contracts edged higher by 25 paise, or 0.16 per cent, to Rs 153.95 per kg in a business volume of 1,341 lots. 
Market analysts said fresh positions created by traders due to upsurge in demand by batt .. 
Analysts said fresh positions created by traders after positive demand from consuming industries mainly led to rise in aluminium prices. 

Gold's safety net attracts investors as trade tensions intensify - Commodity Trading Chennai

US-China trade concerns have been lingering over global markets since last year however gold failed to benefit as we saw a rush towards the US dollar.

It has been a fabulous year for gold so far as it has risen over 19 percent and tested the highest level in six years. Gold in the international market hit a high of $1,555.07/oz, the highest level since April 2013. The notable development, however, is that gold has regained its status as a safe-haven asset.

 US-China trade concerns have been lingering over global markets since last year however gold failed to benefit as we saw a rush towards the US dollar. Firmness in US and global equity market also reduced gold’s demand as an alternative asset. Trade tensions have intensified in last few months as both US and China have imposed import tariffs against each other while attempts at talks have failed to yield result. This along with slowdown in economic activity in major economies has been enough to cause a rush towards safe haven assets. The latest push came in after China announced 5-10 percent import duty on $75 billion Chinese goods and US retaliated by increasing import tariffs on $550 billion goods by another 5 percent. Gold has however not been the sole beneficiary of flight towards safe havens. The Japanese Yen has hit the highest level since November 2016 while US 10-year bond yield has slipped to lowest level since July 2016 lows. Along with safe haven buying, gold has also benefitted from loose monetary policy stance of major central banks. Fed has already cut key lending rate by 0.25 percent and market expectations are high of further rate cut despite the central bank maintaining a non-committal stance. A spate of other central banks has also cut lending rates to boost growth. Robust investor interest has also added to gold’s allure. Gold holdings with global ETF’s have risen by nearly 210 tonnes so far to stand near 2427 tonnes, the highest since March 2013. With increasing global economic uncertainty, it is likely that we may see the upward momentum in gold continuing. However, it could be a tumultuous ride as we await more clarity in major issues. The key questions lingering at present is whether US-China will reach a trade deal, whether Fed will cut interest rate again, whether US economy may face another recession and whether Britain will exit European Union without a deal. Unless these questions are answered we are bound to see volatility in financial markets which could benefit safe havens like gold.

Commodity Trading Gold - Indian Business Trade Inc

Gold at over six-year peak as trade war escalation sparks safe-haven rush :

Gold prices scaled a fresh six-year high on August 26, as the latest tit-for-tat tariffs by the United States and China in their year-long trade war battered global equities and boosted demand for safe-haven assets. Spot gold jumped 0.9% to $1,539.70 per ounce as of 0414 GMT, having earlier touched $1,554.56 an ounce, its highest since April 2013. US gold futures were up 0.8% at $1,549.50 an ounce. On August 23, US President Donald Trump announced a 5% additional duty on $550 billion in targeted Chinese goods, hours after Beijing unveiled retaliatory tariffs on $75 billion worth of US products. "Gold was the beneficiary of President Trump's tweetstorm on August 23," said Stephen Innes, managing partner at VM Markets. Equity markets plunged in response, with the US stocks plunging on August 23, and the Asian ones following on August 26. Traders were also tracking the Group of Seven summit, where Trump indicated he may have had second thoughts on the tariffs. Later, the White House clarified that Trump wished he had raised tariffs on Chinese goods even higher last week. Gold retraced some of the earlier gains as traders locked in gains. "What we are seeing right now is a bit of profit taking coming in, but that doesn't change the overall sentiment for gold," said OANDA analyst Jeffrey Halley. Meanwhile, in a possible softening, Chinese Vice Premier Liu He said on August 26 that China opposes the escalation of the trade conflict, a state-backed newspaper reported. On August 23, Fed Chair Powell said the US central bank will "act as appropriate" to keep the economy healthy, although he stopped short of committing to rapid-fire rate cuts. The markets are fully priced for a quarter-point cut in rates next month, and over 100 basis points of easing by the end of next year. Yields on 10-year Treasury notes dived from a top of 1.66% on August 23, leaving them almost matching two-year yields. The drop in yields caused the dollar index, which measures the greenback's value against a basket of six major currencies, to slide 0.5% on August 23, and was hovering close to that level. Lower bond yields and a weaker dollar reduce the opportunity cost of holding non-interest bearing gold. Spot gold may peak in a range of $1,546-$1,569 per ounce, said Reuters technical analyst Wang Tao. Indicative of market sentiment, SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.58% to 859.83 tonnes on August 23. Hedge funds and money managers increased their bullish stance in COMEX gold in the week to August 20, the US Commodity Futures Trading Commission said on August 23. Elsewhere, silver was up 1.3% at $17.62 per ounce and platinum gained 1% to $862.
Palladium climbed 0.5% to $1,467.23 per ounce.