UPDATE 4-Oil loses ground as rising U.S. output threatens to disrupt tightening market - Reuters News
22-Mar-2018 03:51:36 PM
• Soaring U.S. production tempers generally bullish mood
• Ongoing OPEC-led supply restraint has been supporting prices
• Goldman sees Brent at $82.50 per barrel by mid-year
Updates prices
By Henning Gloystein
SINGAPORE, March 22 (Reuters) - Oil prices gave up earlier gains as the relentless rise in U.S. crude production threatens to undermine efforts led by producer cartel OPEC to tighten the market.
Brent crude futures were at $69.34 per barrel at 0750 GMT, down 13 cents, or 0.2 percent from their last close.
U.S. West Texas Intermediate (WTI) crude futures were at $65.13 a barrel, down 4 cents from their previous settlement.
Both benchmarks on Wednesday hit their highest levels since early February, having risen around 10 percent from March lows.
An overall mood of confidence in the oil market is being tempered by U.S. crude production, which climbed to a fresh record of 10.4 million barrels per day (bpd) last week, putting the United States ahead of top exporter Saudi Arabia and within reach of Russia's 11 million bpd.
Despite the relentless rise in U.S. output, up by almost a quarter since mid-2016, traders said oil markets remain well supported.
In a sign of healthy demand, U.S. crude inventories fell 2.6 million barrels in the week ended March 16 to 428.31 million barrels, the Energy Information Administration (EIA) said late on Wednesday.
"Inventory data for last week showed a surprise crude draw as well as significant drawdowns in both gasoline and distillates inventories," said William O'Loughlin, investment analyst at Australia's Rivkin Securities.
Dutch bank ING said the drawdown in U.S. crude inventories was down to a fall in imports by around 500,000 barrels per day (bpd) to an average 7.08 million bpd last week, and a rise in exports by 86,000 bpd to an average 1.57 million bpd. Also, refinery utilisation rates rose above 90 percent for the first time since early February.
Further supporting oil prices has been supply restraint led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia, which started in 2017 and is scheduled to go on for the rest of 2018.
OPEC said on Wednesday the cuts were close to having the desired effect of bringing down global inventories to five year averages, although it gave little detail.
U.S. bank Goldman Sachs said OPEC was "likely to overshoot on the inventory rebalancing", and as a result, it saw Brent reaching $82.50 per barrel by mid-year."
(Reporting by Henning Gloystein; Editing by Richard Pullin and Sherry Jacob-Phillips)
PRECIOUS-Gold hovers near 2-wk high on weaker dollar after Fed rate view - Reuters News
22-Mar-2018 04:15:08 PM
• Fed hikes interest rates, sticks to 2 more hikes view
• Gold up 1.4 percent so far for the week
• Trade war tensions between U.S. and China seen supporting gold
(Adds comment, updates prices)
By Eileen Soreng
March 22 (Reuters) - Gold prices held steady on Thursday, hovering near two-week highs hit in the previous session on a weaker dollar after the U.S. Federal Reserve disappointed investors, who were expecting more hawkish comments on interest rate rises.
The Fed raised interest rates on Wednesday and forecast at least two more hikes in 2018, contrary to three more increases most market watchers expected.
In its first policy meeting under new Fed chief Jerome Powell, the U.S. central bank indicated that inflation should finally move higher after years below its 2 percent target and that the economy had recently gained momentum.
"The FOMC statement was more dovish than we thought warranted ... At some stage, the Fed will have to grasp the nettle, but the danger is that in doing so, it will bring forward a credit crunch," said Alasdair Macleod, head of research with Toronto-based Goldmoney Inc.
"These are good conditions for gold, because we can expect the dollar to weaken."
Spot gold rose 0.1 percent to $1,332.77 per ounce at 0739 GMT. Prices rose to a two-week high of $1,336.59 of Wednesday, and also registered their biggest single-day percentage gain since May 17, 2017.
U.S. gold futures for April delivery rose 0.7 percent to $1,331.10 per ounce.
"The fact that gold approached its recent 2018 low (of $1,306.91) on Tuesday, but failed to penetrate it, must also be construed as a constructive sign for technical traders," INTL FCStone analyst Edward Meir said in a note.
Against a basket of currencies, the dollar index was down 0.3 percent at 89.509, after touching an over one-month low of 89.396. The Fed's decision led the U.S. dollar to its largest fall in two months.
Meanwhile, investors see trade tensions between the U.S. and China lending further support to gold, which is seen as a safe-heaven asset during times of political and financial uncertainty.
"If you factor in the significant near-term geopolitical concerns and the uncertain equity market fallout from an escalation of a trade war with China, gold has to be a mainstay component in any investment portfolio," Stephen Innes, APAC trading head at OANDA, said.
In other precious metals, spot silver was up 0.3 percent to $16.57 per ounce, while platinum gained 0.6 percent to $959.30 per ounce.
Palladium was little changed at $989.72 per ounce.
(Reporting by Eileen Soreng in Bengaluru; editing by Richard Pullin and Sunil Nair)
VEGOILS-Palm oil slides as govt resumes export tax from April - Reuters News
22-Mar-2018 02:25:56 PM
• Malaysia sets export tax at 5 pct in April after 3-month suspension
• Lower soyoil, stronger ringgit also weigh on sentiment, says trader
By Liz Lee
KUALA LUMPUR, March 22 (Reuters) - Malaysian palm oil futures fell in early trade on Thursday after three straight sessions of gains, as the government announced a resumption of export tax on the tropical oil after a three-month suspension.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was down 0.5 percent at 2,437 ringgit ($623.43) a tonne at the midday break.
Trading volumes stood at 36,068 lots of 25 tonnes each.
The resumption of export tax weighed on palm futures, said a futures trader based in Kuala Lumpur.
Malaysia set its crude palm oil export tax at 5 percent in April, after a three-month duty suspension implemented at the start of the year, a government circular on Thursday showed.
Lower soyoil prices and a rebound in the ringgit also kept the market weaker, said the trader.
The ringgit strengthened 0.4 percent to 3.9085 against the U.S. dollar early on Thursday. A stronger ringgit makes the tropical oil less attractive to buyers holding foreign currencies.
In related oil, the Chicago Board of Trade's May soybean oil contract was down 0.4 percent. The May soybean oil on China's Dalian Commodity Exchange rose 0.6 percent, while the May palm oil contract rose 0.2 percent.
Palm oil prices are affected by movements in rival edible oils as they compete in the global vegetable oils market.
The market is range bound, and will react to news but stocks will be the deciding factor, said another trader. Traders expect the Malaysian Palm Oil Association to release the national output data this week.
"Any news will swing it. The export tax for April definitely bears an impact. Likewise the market was up yesterday on news that Indonesia won the biodiesel dispute with the European Union," the trader said.
(Reporting by Liz Lee; Editing by Subhranshu Sahu)
GRAINS-Wheat prices ease on rain outlook for U.S. winter crop - Reuters News
22-Mar-2018 11:12:02 AM
• Wheat falls for 4 out of 6 sessions on U.S. rain f'cast
• Brazil to boost soybean exports as drought cuts Argentina supply
Adds details, quotes
By Naveen Thukral
SINGAPORE, March 22 (Reuters) - Chicago wheat futures lost ground on Thursday and were hovering near a one-month low hit in the previous session on prospects of more rains in the parched U.S. winter crop areas.
Soybeans rose for a third consecutive session on strong demand while corn extended Wednesday's gains.
The most-active wheat contract on the Chicago Board Of Trade slid 0.2 percent to $4.52-3/4 a bushel by 0254 GMT. Prices dropped to lowest since February 22 at $4.46-3/4 a bushel on Tuesday before closing marginally higher.
Soybeans rose 0.3 percent to $10.33 a bushel, having firmed 0.1 percent on Wednesday and corn added 0.2 percent to $3.75-3/4 a bushel, having closed up 0.1 percent in the previous session.
"Wheat prices rallied in the weeks leading up to mid-March as U.S. 2018/19 harvest prospects deteriorated, but are showing signs of reversing as the U.S. declines are priced in," according to BMI Research, a unit of Fitch Group.
"Given that there are few harvest concerns and spring sowings in the northern hemisphere have yet to begin in earnest, we anticipate wheat prices to continue drifting lower towards $4.50 a bushel over the coming weeks."
Wheat is under pressure as weather forecasts call for further showers across the southern Plains, potentially boosting crops.
Meanwhile, India dropped a plan to double a wheat import tax to 40 percent, two government sources said, in a sign it expects imports to make up for a shortfall in domestic production for the third year in a row.
Worries about the impact of a potential trade war on U.S. grain and soy exports hung over the market, capping rallies, as U.S. President Donald Trump prepares to announce up to $60 billion in import duties on Chinese goods.
The U.S. Department of Agriculture's attache in China put soybean imports in the 2018/19 season at 100 million tonnes, up from 97 million in 2017/18.
Brazil is expected to capture a larger share of the soybean export market.
Brazil's soybean farmers are poised to export a record volume of the oilseeds this year as a drought reduces supplies from neighbouring Argentina, André Pessoa, founding partner of consultancy Agroconsult, said on Tuesday.
The USDA said private exporters sold 138,000 tonnes of U.S. corn to South Korea, marking the third such sales announcement to various buyers in as many days.
Commodity funds were net buyers of CBOT soyoil, soybean, soymeal and corn futures on Wednesday and net sellers of wheat, traders said.
(Reporting by Naveen Thukral; Editing by Vyas Mohan)
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