Crude settles higher after Iraq and Algeria lift hopes for further cuts - 12 May 2017
Gold steadies as dollar edges lower.
Gold prices traded higher on Thursday, buoyed by a weaker dollar, despite the release of bullish economic data. Gold futures traded above eight-week lows amid political turmoil in Washington, after President Trump unexpectedly fired FBI chief James Comex but gains were capped by better than expected producer inflation and labor market data. The bullish initial jobless claims report fuelled expectations that the Federal Reserve would hike its benchmark rate in June amid a tightening labor market. Gold is sensitive to moves higher in bond yields, which lift the opportunity cost of holding non-yielding assets such as bullion.
LME Copper to Move in a Tight Range.
LME copper will move at USD 5,500-5,550/mt during Asian trading hours on Friday and SHFE 1707 copper will move at RMB 44,900-45,300/mt. In China’s domestic market, spot copper should trade at premiums of RMB 20-60/mt on Friday.
SHFE Lead to Set with Gains.
LME lead moved above the 5-day moving average and found support at USD 2,175/mt, but was still weighed by other moving averages. The contract will trade at USD 2,1752,200/mt on Friday. SHFE 1706 lead advanced above the 5, 10 and 20-day moving averages on Thursday’s nigh trading and will fluctuate between RMB 16,150-16,400/mt on Friday. In China’s domestic market, spot lead should drop RMB 25/mt and trade at RMB 16,050-16,150/mt on Friday.
Crude settles higher after Iraq and Algeria lift hopes for further cuts.
Crude futures settled higher on Thursday, as investor sentiment remained positive amid a large drawdown in U.S. crude stockpiles while hopes for an extension of the OPEC-led deal received a boost. In November last year, OPEC and other producers, including Russia, agreed to cut output by about 1.8 million barrels per day (bpd). The deal to cut production began in January this year, for a period of six-months until June. OPEC is expected to decide at talks on May 25 whether to extend the current deal to cut production for an additional six-months to the end of the year. In its monthly report on Thursday, OPEC announced that group production fell in April, and projected non-OPEC production this year to grow by 950,000 barrels per day (bpd).
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