Oil prices were higher in North American trade on Wednesday, extending gains into a third-straight session – 12 July 2017
CRUDE OIL – Oil prices were higher in North American trade on Wednesday, extending gains into a third-straight session, as investors looked ahead to weekly data from the U.S. on stockpiles of crude and refined products later in the global day. Oil ended higher on Tuesday, rising about 1.4%, as a lower 2018 forecast on U.S. crude production and speculation of possible output curbs in Libya and Nigeria fueled the strongest session gain for prices in over a week. The two countries had been exempted from the pact among major oil producers, led by the Organization of the Petroleum Exporting Countries, to limit global production and ease a glut of oil that has plagued the industry. OPEC will release its monthly oil report later in the day, which includes figures on the state of global crude stockpiles. The data will give traders a better picture of whether a global rebalancing is taking place in the oil market. Saudi Arabia will cut crude oil shipments to its customers in August by more than 600,000 barrels per day to balance the rise in domestic consumption during the summer, while staying within its OPEC production commitment, a Saudi industry source said. “There is strong demand for our crude but we are sticking to our OPEC commitments,” the source, who is familiar with the kingdom’s oil policy, said on Wednesday.
GOLD – Gold prices edged higher in European trade on Wednesday, extending gains into a third-straight session, as investors awaited comments from Federal Reserve Chair Janet Yellen for fresh cues on policy direction. Yellen is scheduled to testify on the economy before the Senate Banking Committee at 10:00AM ET (1400GMT) Wednesday. Text of the testimony will be released 90 minutes before she starts speaking. Her comments will be monitored closely for any new insight on the timing of the next U.S. rate hike and clues on how the central bank plans to pare back its massive balance sheet. The Fed hiked rates at its June meeting and stuck to its forecast for one more rate hike this year, but the subdued inflation outlook has since raised doubts over whether the U.S. central bank will be able to stick to its planned tightening path. Fed Governor Lael Brainard on Tuesday suggested her support for any future rate increases will depend in part on how inflation shapes up. Futures traders are pricing in around a 50% chance of a hike by the end of the year, according to Investing.com’s Fed Rate Monitor Tool. The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion. Besides the Fed, investors will be keeping a close eye on Washington, for any more political noise coming out of the White House as the Russia-linked scandal continues to rumble on. Donald Trump Jr. released an email chain on Tuesday, which referred to a top Russian government prosecutor as offering the Trump campaign damaging information about Democratic rival Hillary Clinton. The emails are the most concrete evidence yet that Trump campaign officials welcomed Russian help to win the election, a subject that has cast a cloud over Trump’s presidency and spurred investigations by the Justice Department and Congress.
ALUMINIUM – Alcoa announced to resume operation of 3 in 5 electrolytic cells at aluminum smelter in Indiana, as Trump launched investigations on imported aluminum which may harm profits of aluminum producers in US. The output resumption will complete in Q2 2018, leading to annual output at 161,400 tonnes. In other news, captive power plant of Alpart alumina plant succeeded in restarting production after staff’s hard effort.
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