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.

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.

Oil prices eke out small gains ahead of Fed Chair speech

Brent crude rose 10 cents to $60.02 a barrel by 0118 GMT, while U.S. crude futures were at $55.38 a barrel, up 3 cents. Both contracts were on track for a second weekly gain.

Oil prices clawed back the previous day's losses on Friday, with Brent nudging above $60 a barrel, as tighter supplies from key producers offset slowing demand growth while investors await clues from the Federal Reserve on U.S. monetary policy. Brent crude rose 10 cents to $60.02 a barrel by 0118 GMT, while U.S. crude futures were at $55.38 a barrel, up 3 cents. Both contracts were on track for a second weekly gain. "Oil is set to trade quietly today as it's all about the Jackson Hole (meeting) tonight," Jeffrey Halley, a Singapore-based senior market analyst at brokerage Oanda. "What we're seeing is some profit-taking in Asia in very light volumes." A speech by Federal Reserve Chair Jerome Powell later on Friday t a meeting of central bankers in Jackson Hole is expected to provide some clues on whether the Fed will cut interest rates for a second time this year to boost the U.S. economy. Traders' expectations of further U.S. monetary easing were clouded by comments from two Fed officials who said on Wednesday that they do not see a case for a rate cut now. A reduction in interest rates could strengthen the U.S. dollar against other currencies and make dollar-denominated oil more costly for investors. Oil prices are down for nearly two straight months after the International Energy Agency and the Organization of Petroleum Exporting Countries cut demand growth forecasts as a simmering U.S.-China trade war hit global economic growth. However, oil prices remained supported by production cuts from OPEC members and Russia while U.S. sanctions have sharply reduced exports from Iran and Venezuela.

Gold prices are expected to trade lower today: IBT Commodity Trading :

According to Angel Commodities, on Monday, spot gold prices dipped by 1.24 percent to close at $1495.0 per ounce. On Monday, spot gold prices dipped by 1.24 percent to close at $1495.0 per ounce. Spot gold prices declined below the $1500 mark recording its biggest daily fall in almost a month. Markets seem to move towards riskier assets as the U.S. Treasury yield curve is no longer pointing towards an evident recession. Correction in the treasury yield supported the U.S. Dollar and weighed on the yellow metal prices. Moreover, the dispute between U.S. & China showed some signs of easing the intense trade war which further boosted the risk appetite amongst investors. Rising bond yields globally amid easing of tension between the biggest economies in the world dented the appeal for the bullion metal.

We expect gold and silver prices to trade lower as appreciation in the U.S. Dollar and fading concerns over a possible recession dented the appeal for the safe haven asset, Gold. ON the MCX, gold prices are expected to trade lower today; international markets are trading lower by 0.39 percent to close at 1505.55 per ounce.

Gold ticks up on Iran tensions; firmer dollar limits upside - Commodity Trading in Chennai

Gold prices gained on Monday following a steep fall in the previous session as tensions in the Middle East and weaker financial markets supported the metal, while a stronger dollar kept a lid on gains.

"Over the weekend, what happened between Iran and the United Kingdom is supporting gold prices today," said Brian Lan, managing director at dealer GoldSilver Central in Singapore. "Also, equities are lower and at this point of time with geo-political tensions and the Fed looking to cut rates, gold looks attractive, but people are worried about the stronger dollar." www.indianbusinesstrade.com 

Commodity Trading Chennai

An ongoing trade battle between the United States and China has magnified the impact of tariffs on commodity prices and economic growth. As we’ll soon see, trade barriers have a ripple effect on global markets, influencing everything from commodities to foreign direct investment (FDI).

Like any other market, commodities are influenced by a range of technical and fundamental factors. In the current macroeconomic climate, trade tensions are having a direct impact on commodities such as agriculture and crude oil. That’s because the two largest superpowers, the United States and China, have engaged in a tit-for-tat trade war that threatens to throw global economic growth off stride.

The impact has already been felt. China’s economy is fresh off its worst year of expansion in nearly three decades and the International Monetary Fund (IMF) has already lowered its growth outlook this year and in 2020 over the perceived trade threat. As a large consumer of commodities, China’s slowdown has had a direct impact on how commodities are priced.

Learn here about how an interest rate hike can affect commodities.

Commodity Trading in Chennai -

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