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1
ENERGY
Oil prices dip as U.S. crude stocks and weak Chinese data weigh
Oil prices came under pressure on Thursday from rising U.S. crude oil
stocks and weak factory activity in China, with few bullish factors on the
horizon.
Brent crude futures were down 13 cents at $60.48 a barrel by 1338 GMT,
erasing earlier gains. They had dropped by 1.6% on Wednesday and the
contract is set for a monthly decline of about 0.5%.
U.S. West Texas Intermediate (WTI) crude futures were down 48 cents at
$54.58. On the month, however, they are set for a rise of about 0.9%, its
biggest monthly gain since June.
The front-month Brent contract for December delivery expires on
Thursday. The one for January delivery was also down.
Factory activity in China shrank for a sixth straight month in October
while growth in the country’s service sector activity was its slowest since
February 2016, official data showed on Thursday.
A protracted trade war between China and the United States has been
weighing on the demand outlook for oil.
Leaders from the United States and China encountered a new obstacle in
their struggle to end the damaging trade conflict when the summit at
which they were supposed to meet was canceled because of violent
protests in host nation Chile.
U.S. President Donald Trump tweeted a new location would be
announced soon.
2
PRECIOUS METAL
Gold makes impressive stand
Wednesday’s Fed announcement brought a lot of action to the
metals as they swung on both sides of unchanged. After being
higher most of the day in the green, gold broke hard, testing the
$1,480 and rallied to close on the high of the day.
Silver showed the same action as gold, testing the $17.60 level
before closing positive on the day. The big question here, are the
metals in the process of reversing? The action has not totally
turned bullish but certainly has become more neutral indicating
they can move either way.
We remain short both gold and silver although not as committed
as we were before. The fact that the metals are now consolidating
and reversing the downtrend has tightened the trading range and
now can break either way. The levels to watch in gold are $1,490-
$1,510 December futures and $17.80-$18.10 silver.
3
BASE METAL
Copper slips on weak economic data from top consumer China
Copper prices fell on Thursday after weaker than expected
manufacturing data from China heightened concern over demand
for the metal used in power and construction.
A protracted trade conflict with the United States has cooled
China’s economic growth and weighed on metals prices, raising
expectations that Beijing will need to roll out more support
measures soon.
China accounts for about half of global copper demand, estimated
this year at about 24 million tonnes.
Benchmark copper on the London Metal Exchange (LME) was bid
down 0.9% to $5,849 a tonne after failing to trade in official rings.
The metal touched a one-week low at $5,835.
“The Chinese data was not too rosy,” said Commerzbank head of
commodities research Eugen Weinberg. “One would hope that
the government would start support and put in countermeasures
with stimulus because sentiment is rather weak.”
CHINA DATA: Factory activity in China shrank for the sixth straight
month in October and by more than expected, while service
sector growth eased as companies grapple with the weakest
economic growth in nearly 30 years.
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Commodity newsletter

  • 1.
  • 2. 1 ENERGY Oil prices dip as U.S. crude stocks and weak Chinese data weigh Oil prices came under pressure on Thursday from rising U.S. crude oil stocks and weak factory activity in China, with few bullish factors on the horizon. Brent crude futures were down 13 cents at $60.48 a barrel by 1338 GMT, erasing earlier gains. They had dropped by 1.6% on Wednesday and the contract is set for a monthly decline of about 0.5%. U.S. West Texas Intermediate (WTI) crude futures were down 48 cents at $54.58. On the month, however, they are set for a rise of about 0.9%, its biggest monthly gain since June. The front-month Brent contract for December delivery expires on Thursday. The one for January delivery was also down. Factory activity in China shrank for a sixth straight month in October while growth in the country’s service sector activity was its slowest since February 2016, official data showed on Thursday. A protracted trade war between China and the United States has been weighing on the demand outlook for oil. Leaders from the United States and China encountered a new obstacle in their struggle to end the damaging trade conflict when the summit at which they were supposed to meet was canceled because of violent protests in host nation Chile. U.S. President Donald Trump tweeted a new location would be announced soon.
  • 3. 2 PRECIOUS METAL Gold makes impressive stand Wednesday’s Fed announcement brought a lot of action to the metals as they swung on both sides of unchanged. After being higher most of the day in the green, gold broke hard, testing the $1,480 and rallied to close on the high of the day. Silver showed the same action as gold, testing the $17.60 level before closing positive on the day. The big question here, are the metals in the process of reversing? The action has not totally turned bullish but certainly has become more neutral indicating they can move either way. We remain short both gold and silver although not as committed as we were before. The fact that the metals are now consolidating and reversing the downtrend has tightened the trading range and now can break either way. The levels to watch in gold are $1,490- $1,510 December futures and $17.80-$18.10 silver.
  • 4. 3 BASE METAL Copper slips on weak economic data from top consumer China Copper prices fell on Thursday after weaker than expected manufacturing data from China heightened concern over demand for the metal used in power and construction. A protracted trade conflict with the United States has cooled China’s economic growth and weighed on metals prices, raising expectations that Beijing will need to roll out more support measures soon. China accounts for about half of global copper demand, estimated this year at about 24 million tonnes. Benchmark copper on the London Metal Exchange (LME) was bid down 0.9% to $5,849 a tonne after failing to trade in official rings. The metal touched a one-week low at $5,835. “The Chinese data was not too rosy,” said Commerzbank head of commodities research Eugen Weinberg. “One would hope that the government would start support and put in countermeasures with stimulus because sentiment is rather weak.” CHINA DATA: Factory activity in China shrank for the sixth straight month in October and by more than expected, while service sector growth eased as companies grapple with the weakest economic growth in nearly 30 years.
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