OIL:
Headlines, Rumors & Statements
Continue To Push Oil Prices
The headlines continue to focus on
the late September meeting of OPEC and non OPEC producers. Oil prices extended
their rally following Russia’s oil minister’s comments that they are also
meeting with the Organization of the Petroleum Exporting Countries in October.
Saudi Arabia has also shown their consent on stabilizing crude oil prices and
taking all possible actions.
Russia and Saudi Arabia are the globes two
largest crude oil producers and their move towards stabilizing crude oil prices
could have a significant impact on other crude oil producers and crude oil
prices.
However, it appears that production talks
may continue into October, as Russian oil minister is likely to meet with OPEC
producers, particularly with Saudi’s minister in October after the informal
meeting among OPEC producers in late September.
Traders are closely monitoring prices as
the magical $50 level will send US shale producers back into full operational
mode.
Comments from the Saudi’s indicate the
country may be increasing its August crude output to a new all-time high as it
could give it more leverage to influence the September informal talks on a
possible production freeze, Reuters reported on Wednesday, citing industry
sources.
Brent Oil Breaks The Magic $50 Price
But the cases of Nigeria and Libya could
complicate the proposed OPEC deal as the two countries cannot cut output
further, following the recent production cuts suffered by both countries on
account of internal crisis.
COPPER:
For those who are still
pessimistic over copper market fundamentals, latest data from the World
Bureau of Metal Statistics (WBMS).
WBMS data showed global copper supply deficit
expanded in H1 2016 and consumption grew faster than supply.
According to the WBMS, global copper
market was in a supply deficit of 197,000 tons in H1 2016.
Global refined copper output rose 3.4%
year-on-year to 11.60 million tonnes in H1 2016, driven by 250,000 ton
increase in China and 28,000 ton growth in Chile.
Meanwhile, global apparent copper
consumption also rose, up 6.69% from a year ago to 11,800,211 tonnes in
H1 2016, with growth in China, the EU and India, versus declines in
Japan, South Korea and the US.
Apparent copper consumption in China rose 9.8% from a
year ago to 5,852,015 tons in H1 2016, claiming 49.59% of global demand,
while that in the EU increased 4.4% to 1,773,302 tons.
The World Bureau of Metal Statistics
(WBMS) has published the Metals Balances Report for the first six months of the
current year. The global primary Aluminum and Lead markets recorded marginal
deficit during Jan-June ’16. Also, Copper market too reported small deficit
during the initial half of the year.
Aluminum:
The latest report published by the World Bureau of Metal
Statistics (WBMS) indicates that global primary aluminum market has recorded a
marginal deficit during the initial six months of the year. As per the report,
the market reported a deficit of 479,000 tons when matched with the deficit of
331,000 reported for the entire year 2015.
Lead:
The global lead market has recorded a deficit of 46,000 tonnes
during January to June this year. It must be noted that the worldwide lead
market had reported a deficit of 4.0 kt for the entire year 2015.
The global refined lead output during Jan-June ’16 increased
marginally by 1.9% over the previous year to 5,145.7 kt. This is inclusive of
production from primary and secondary sources.
The global lead demand during Jan-June ‘16 has surged higher by
136kt. The Chinese apparent consumption in January to June 2016 totaled 1,959
kt, which is marginally lower by 9 kt when matched with the corresponding
six-month period in 2015. The Chinese apparent consumption represented nearly
37% of the global total. The apparent demand dropped by 15 kt in the US.
LME lead is expected to challenge the year’s best level of $
1,916 per tonne in the coming week.
ZINC:
LME zinc is expected to hover at highs
between $2,250-2,320 per tonne next week, and SHFE October zinc will trade
between 17,300-17,900 yuan per tonne, SMM foresees.
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