Tag Archives: stockpiles

crude oil drop

Crude Prices Fall to 4-Month Low as Production Hits 24-Year High

Crude oil price is hovering dangerously over its four-month low price as futures rose 1 mere cent above the lowest close since June. With investors speculating that U.S. stockpiles have increased for a seven consecutive week, outlook does not appear to be improving for West Texas Intermediate, which has vacillated between gains and losses four the last four months.

With the U.S. economy, and the global one by consequence, on the rocks last month over the partial government shutdown and the Fed’s meeting tapering or extension of quantitative easing pumped into the nation’s economy, investors look forward to tomorrow’s release of supply data by the Energy Information Administration to assess demand levels in the world’s biggest consumer of oil.

Last week’s production reached a 24-year high while crude stockpiles expanded by 2.2 million barrels to 386.1 million. WTI for December delivery was at $94.50 a barrel in electronic trading on the New York Mercantile Exchange, down 12 cents, at 4:26 p.m. Singapore time. It closed at $94.61 on Nov. 1, the lowest since June 21. The volume of all futures traded was about 48 percent below the 100-day average.

Concerns that the U.S. government’s 16-day shutdown put a drag on economic growth and hampered oil demand has been keeping traders on their toes as they await the release of other key economic data later in the week that might shed more light on the Fed’s true stance towards its $85 million bond-buying programme after officials said they would proceed with the curtailing of the stimulus upon receiving more indicators of strengthened economy.

Third-quarter’s preliminary economic growth to be released on Thursday and the highly anticipated Non-Farm Payrolls report scheduled for Friday (delayed 7 days due to last month’s halt in government operations) will play an important role not only on investor sentiment, but also on the Fed’s decision regarding economic stimulus at its next meeting in December.

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palm oil

Palm Oil Record Record Gain

Palm Oil recorded its biggest weekly gain in three years and send futures into a bull market, as it advanced on speculation that rain may have diminished production in main suppliers Indonesia and Malaysia.

Futures climbed 1.2 percent to 2,623 ringgit ($827) a metric ton on the Bursa Malaysia Derivatives, the highest close since September 2012. The new value marks a 21 percent increase over the 2,167 ringgit settlement on July 29, meeting the common definition of a bull market. Palm gained 7.3 percent this week, the most since 2010, and is set for its first annual gain in three years.

Prices hiked up on fears that output is less than analysts expected and that beginning of the monsoon season this month would further restrict supply. Although palm enjoys year-=long production, output peaks from July to October. Several major plantations in Indonesia said production unexpectedly fell 7 to 10 percent in the first 10 months due to rain and the growing cycle.

With stockpiles lower than last year’s and third-quarter production, the most significant one in the year, also lagging in comparison investors seem to have gown excited over the commodity.

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Oil_well

WTI Falls Along With U.S. demand

West Texas Intermedeiate (WTI) recorded another drop, prolonging its second monthly loss with increased crude stockpiles in the U.S. indicating slower demand in the world’s biggest oil consumer.

Futures took a hit of 0.8 percent in New York when the industry-funded American Petroleum Institute announced that inventories increased by 5.9 million barrels last weeks. Supplies reached 382.2 million barrels, recording a jump of 2.4 million barrels, the highest in four months before data from the Energy Administration today.

December deliver of WTI fell as much as 80 cents to &97.40 a barrel on the New York Mercantile Exchange, which the volume of all futures traded declined 17 percent more than the 100-day average. October has seen a drop of 4.5 percent following a 4.9 percent drop last month.

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Platinum

Platinum and Palladium Predicted Best Performing

Record global car sales will keep platinum and palladium in high demand and short supply for the third year in a row, according to forecasters.

The prediction marks the longest stretch of shortage for the metals, which are used as catalytic converters, since 2005 for platinum and 2000 for palladium. Platinum is expected to gain 13 percentage to average $1,635 an ounce by the fourth quarter of next year. Palladium is predicted to gain 10.3 percent to average $823 an ounce, its highest for a quarter since 2001.

Unlike gold and silver that have slumped 20 percent or more as investors lose faith in them as a commodity of value, the market is bullish on platinum and palladium. Although metal stockpiles are diminishing as mining companies have difficulties in keeping up with current demand, car sales growth is projected to increase to 4.8 percent in 2014 from 2.7 percent this year.

It is expected, however, that improving mine output will decrease shortages. The platinum deficit is projected to decline 59 percent to 239,000 ounces and that in palladium to narrow 16 percent to 686,000 ounces, according to Barclays. Primary supply will expand 0.4 percent for palladium and 2.1 percent for platinum, the bank says. Should mines be disrupted by strikes or natural disasters, there exist stockpiles that can be tapped. This year, about 80,000 ounces of platinum was lost to such events.

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