OPEC+ to Weigh Production Cut to Support Oil Prices – Commodity Roundup

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— Brent crude jumped 4% to $88.54 a barrel.

— European natural gas fell 7% to 176 euros per megawatt hour.

– Gold futures edged up 0.1% to $1,673.80 per troy ounce.

–LME copper prices fell 1% to $7,416 per metric ton.

–Wheat futures rose 1% to $9.31 a bushel.


TOP STORY:

OPEC+ to weigh in on production cut to support oil prices

OPEC+ is expected to consider its most drastic output cut since the pandemic on Wednesday to help support falling oil prices, a move that could put pressure on global economic growth.

The Organization of the Petroleum Exporting Countries and its Moscow-led allies, collectively known as OPEC+, are considering a cut of more than 1 million barrels a day, group delegates said.

Concerns about a slowing global economy have caused oil prices to fall at their fastest rate since the start of the Covid-19 outbreak in early 2020, prompting OPEC+ to consider ways to support the price of oil. Any move by OPEC+ to raise oil prices could put additional pressure on Western consumers already hit by high energy costs while helping Russia, one of the world’s largest energy producers. , filling its coffers as it waged war on Ukraine.

Oil prices had soared above $100 a barrel and stayed there for months, but Brent crude, the global oil benchmark, is now down 23% this quarter, falling to $87.96 a barrel last week, and its fastest decline since 2020.


OTHER STORIES:

China redirects US liquefied natural gas to Europe at big profit

China’s economic slowdown, a Trump-era trade deal and Europe’s desperate search for natural gas are creating a boon for some Chinese energy companies. The unusual alignment helps Europe stock up for the winter.

With demand dwindling, Chinese companies that signed long-term contracts to buy U.S. liquefied natural gas are selling off the excess and earning hundreds of millions of dollars per shipment. Buyers include Europe, Japan and South Korea. Only 19 US LNG carriers docked in China in the first eight months of the year, compared to 133 for the same period last year.

So far this year, China receives almost 30% more gas from Russia, according to data from China Customs. The increase is due to an expected increase in deliveries from the Power of Siberia pipeline and purchases of Russian LNG, usually at a very favorable price, according to shipping data.

Nikola tries to ignite the market for its hydrogen fuel cell trucks

While the founder of Nikola Corp. goes on trial for securities fraud, a revamped management team is working to make the company the first to market hydrogen-powered commercial trucks in the United States — and overcome production and credibility issues that have plagued his actions.

The seven-year-old company’s first battery-powered electric trucks rolled off the assembly line this year, and around 300 are expected to be built by the end of 2022. Nikola said he plans to start to produce hydrogen-powered heavy-duty trucks. cells next year. The Arizona-based startup said it has orders for about 1,500 trucks in total for its battery-powered and hydrogen fuel-cell models, designed to pull tractor-trailers with cargo.

Cleantech Lithium Increases Chilean Project Resource Estimate

Cleantech Lithium PLC said on Monday it has raised the resource estimate for its Francisco Basin lithium project in Chile by more than 2 million metric tons after a new discovery.

The lithium exploration company said the first well of its four-well program in the basin had found a brine aquifer at relatively shallow depths and brine samples had been taken with an average grade of 305 milligrams per liter.

Galp CEO Andy Brown to step down at the end of the year

Galp Energia SGPS SA announced on Monday that Managing Director Andy Brown will step down at the end of the year.

The Lisbon-based energy company will appoint its new leader by then, he said.

Coffee prices in Rwanda rose a week to Sunday

The average price of Rwandan coffee sold for export rose by 31 percent in the week ending Sunday, the National Agricultural Export Board said on Monday.

Coffee beans were selling for an average of $7.60 per kilogram, down from $5.80 per kilogram the previous week, the council said.

Rainbow Rare Earths confirms the economic solidity of the project in South Africa; Stocks rise

The actions of Rainbow Rare Earths Ltd. rose on Monday after it said a preliminary economic assessment of its Phalaborwa rare earth minerals project in South Africa confirmed the economic soundness of the project.

Shares at 0739 GMT were up 1.25 pence, or 11% to 12.5 pence.


MARKET TALKS:

Palm oil prices rise as inventories drop expected

10:07 GMT – Palm oil prices rise slightly at the end of Asian trade as inventories of the commodity are expected to have fallen on the back of higher exports, said Abdul Hameed, sales director at Manzoor Trading, based in Pakistan. He says Malaysian Palm Oil Board data due Oct. 10 could show inventories have fallen due to minimal production. Palm oil prices could have bottomed out as they did not fall below MYR 3,200 per metric ton during the session, he adds. The benchmark contract for December delivery is MYR 12 higher at MYR 3,428 per tonne. ([email protected])

The OPEC+ cut will likely be bigger on paper than in reality

0827 GMT – The possibility of an OPEC+ million-barrel-a-day production cut is driving oil prices higher, but the cut would likely have little impact on the group’s actual output levels. The cartel is currently missing its production target of 3.5 million barrels per day due to limited spare capacity and poor infrastructure, said DNB Markets analyst Helge Andre Martinsen. A reduction of one million barrels per day would likely translate to a drop in actual production of only 400,000 barrels per day, he says. Most cartel members underproducing “the majority of the band will feel no pain in supporting a reduction in production,” Martinsen said in a note. ([email protected] )

LME ban on Russian metal would not prevent imports

08:16 GMT – A London Metal Exchange ban on the delivery of Russian metals to its warehouses would make it more difficult, but not impossible, for Western consumers to buy Russian metals, Goldman Sachs says in a note. Fears that the LME was considering such a move sent aluminum prices higher, although the gains have tapered off considerably. A delisting from the LME would not be akin to Western governments sanctioning Russian metals and therefore would not impose any restrictions on consumers in Europe or elsewhere to buy directly from Russian sources, GS said. But some might be reluctant to do so because the metal would not have the quality assurances that LME-approved metal has, according to the US bank. ([email protected] )

Metals weaken on absence of Chinese traders

0801 GMT – Metal prices edge lower as growth persists, despite Chinese markets being closed for a week-long holiday, undermining trading volumes. Three-month copper on the London Metal Exchange is down 0.6% at $7,448.50 a metric ton while nickel is down 1.6% at $21,060 a ton. Aluminum was the only metal to rise, edging up 0.3% to $2,148.50 a tonne. Analysts are still considering the impact an LME ban on Russian metals would have on European metals markets, with aluminum likely to be hit the hardest by any restrictions on Russian metals. A ban would make it more difficult, but not impossible, for Western buyers to obtain Russian metals, Goldman Sachs said in a note. ([email protected])

Oil jumps as OPEC expected to consider major production cut

0747 GMT – Oil prices are surging ahead of this week’s OPEC+ meeting in which the cartel is expected to debate a million-barrel-a-day production cut. Brent crude oil rose 3.6% to $88.22. If the group goes ahead with the cut, it will be the second in as many meetings, even though a production cut of one million barrels per day would be ten times greater than its last cut. Band members are divided on the size of the cut, however. The cartel will meet in person on Wednesday for the first time since the start of the Covid-19 pandemic to discuss the cut. Delegates said the group was considering a reduction of 500,000 to 1.5 million barrels per day. ([email protected] )


Write to Will Horner at [email protected]

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