Forex & Commodity Updates

Forex & Commodity Updates


Posts Tagged commodity news

Crude Oil Update

Feb 17

Posted by FxCommcalls in Commodity Update | No Comments

Technical Recap

Bulls really controlled the action last week beginning with a boost off of the 200-day moving average followed by reinforced settlements above the crucial $72.50 benchmark area.  Prices trended higher for the week through Thursday to $75.70 before pulling back on Friday on a round of profit taking ahead of the 50 and 100-day moving averages.  The market closed firm on the week just above the 7-week dowtrend channel at $74.00 level with a minor uptrend potentially developing early this week.

We are still maintaining settlements below the broken key longer term Quarterly trend lines at the $77.00 to 78.00 range leaves the market vulnerable to renewed selling.  With options expiration on Today (Wednesday), we anticipate rallies early this week, and then begin fade against $78.00 to 80.00 leading to a turnover later in the week.

Technical Outlook

Upside:

The market reversed the 7-week downtrend to start the week off rallying off the $74.00 level on Tuesday. Maintaining settlements above $74.00 to 75.00 supports advances this week targeting the key broken Quarterly trends in the $77.00 to 78.00 range.  Trade or settlements above $78.00 brings the $80.00 psychological mark easily in range for the week.  Any settlements above $80.00 will provide solid Bullish reinforcement with the potential to propel the market back to the Jan 2010 highs at $84.00.  If momentum fades out in the $77.00-78.00 range, longs should cover all positions.

Downside:

Failing rallies at the $77.00-78.00 range generates a sell signal for an initial drive back to the broken 7-week downtrend at $74.00.  Settlements below $74.00 reinforces short term weakness as it puts prices back the weekly downtrend channel while violating the minor daily uptrend.  The objective below $74.00 is placed at the key $72.50-71.75 Support range where shorts should initially scale back positions.  Trade and settlements below $72.50-71.75 will rekindle sustainable Bear forces triggering sell offs targeting the current 2010 lows at $70.00 to 69.50 while bringing the next major objective in range at $68.50-68.00.  A settlement below $70.00 on the week, or trade that takes out the $68.00 level, lines up for $65.00 oil in the coming weeks.

 

Whats Making the News

  1. Crude futures ended sharply higher Tuesday as investors bet that Greece’s debt problems wouldn’t spill over to dent demand for commodities. Light, sweet crude for March delivery settled up $2.88, or 3.9%, at $77.01 a barrel on the New York Mercantile Exchange in its biggest one-day gain since Sept. 30. Brent crude on the ICE futures exchange settled $3.17, or 4.4%, higher at $75.68 a barrel.
  2. Crude oil prices were higher Tuesday after a new report showing that manufacturing activity is on the rise in the New York region and on a weaker US dollar that made purchases in other currencies cheaper for buyers.
  3. With no indication of a fuel price hike happening in the near future, the public sector oil refiners are hoping that crude prices do not spin out of control in 2010-11. Refiners still hope Crude Oil will stay at $75 in 2010-2011.
  4. Bharat Petroleum Corp (BPCL) bought 1 million barrels each of Algerian and Libyan crude in a tender for oil loading in April, trade sources said on Tuesday.
  5. Euro hits a high for the day at 1.3730 cable briefly breaks 1.5700 on the back of higher oil prices, now at 77.15

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Way to tackle sun outage

Jan 18

Posted by FxCommcalls in Commodity Update | No Comments

Commodity exchanges finding way to beat sun outage. The NCDEX is asking its members to connect through an alternative mode instead of VSAT (very small aperture terminal) starting February 20.

MCX has managed to overcome sun outage problem by using advance Data Networking technology jointly provided by the BSNL and MTNL for the last five years.

Sun outage occurs when a satellite and earth are in perfect position. During this period, the interference in satellite signals disturbs VSAT, a two-way satellite ground station, through which trading terminals are connected. Exchanges have been changing or suspending trade timing by 45 minutes during sun outage.

“The exchange has decided that during the sun outage period market would not be suspended and trading would continue in the normal course,” NCDEX said in a circular.

Barring VSATs, leased lines through point of presence, multi-protocol label switching and Internet remain unaffected during the sun outage, NCDEX added.

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Latest Commodity Update

Jan 11

Posted by FxCommcalls in Bullion Update, Commodity Update | No Comments

Crude oil

Crude oil prices rose to a new 15 month high on speculation that fuel demand will rebound as freezing temperatures in the northern hemisphere and weakening dollar also supported the prices.
The oil advanced for the second day as Chinese crude imports climbed to a record 203.8 million metric tons last year weighing over weak last weeks weak US NFP data. Chevron corp, the second largest US energy producer said the Makaraba-utonana pipeline it operates in the southern Nigeria’s delta state was breached on Jan 8, affecting 20,000 barrels of crude oil production a day. Attacks by armed groups in Nigeria’s oil rich delta region have cut the country’s output by more than 25 percent since 2006. Crude Feb month contract was trading at $83.5 gaining 1.57 percent. Crude oil mcx Dec contract was trading at Rs 3790 gaining 0.03 percent.

Base Metals

Copper futures prices rallied for the first time in last three days as Chinese imports and weak dollar boosted investors confidence in the metal. The china imported 369,368 metric tons of copper and its products in December, 27 percent increase from November. The Chinese exports of all products climbed for the first time in 14 months, according to census bureau. LME copper inventories rose by 4575 metric tons and mcx copper is trading at 348.10 gaining 0.96 percent.

 

Technical Trends

GOLD MCX Feb

While above 17000 prices could stay firm and could target 17080/17125 followed by 17250 levels. Unexpected fall below 16978 could see a move lower towards 16920 followed by 16870 levels.
Res: 17080/ 17160 Supp: 16970/16920

Silver MCX Mar:

As long as 28320 holds, prices could move up and find resistance at 28600 initially followed by 28730/29000 levels. If unable to hold 28300 expect a corrective move towards 28150/27980.
Res: 28610/28730 Supp: 28300/ 27980

CRUDE MCX Jan

Dips to 3763 may find support for a rise towards 3805 initially. Rallies above 3812 could invite fresh rallies towards 3848/3878. Falls below 3752 may cause doubts on the bullish view.
Res: 3812/3870 Supp: 3762/3736

Natural Gas MCX Jan

As long as support at 251/249 holds prices could stay firm and edge higher towards 258/261 followed by 264. Falls below 249 may negate the view and target 241.
Res: 258/264 Supp: 254/247

Copper MCX Feb

Dips to 347/345 hold downside expect to move up and find resistance at 349/350.50 followed by 354. If unable to hold 345 drag prices lower towards 343/341 levels.
Res: 349/351 Supp: 347/ 345

Lead MCX Jan

As long as 118.70/120 caps the upside expect a corrective fall towards 117/116 followed by 115.30. Needs to break 120 to negate the view.
Res: 118.70/120 Supp: 117/ 116

Nickel MCX Jan

Moves to 844 may find resistance for a fall towards 831/826. Break below 825 could invite fresh sell off towards 814/802. Needs to break 847 to negate the view.
Res: 845/862 Supp: 831// 824

Zinc MCX Jan

If 118 cap the upside expect a fall towards 116.50/115.50. Need to break 118.70 to negate the view.
Res 118/119 Sup: 116.70/115

Aluminium MCX Jan

If 105 expects to move up and target 106/106.80followed by 107.60 Needs to break 104.20 to negate the view.
Res: 106.20/107 Sup: 105/104.40

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Commodity Update

Jan 8

Posted by FxCommcalls in Bullion Update, Commodity Update | No Comments

Gold prices fell as the dollar rose broadly ahead of a key U.S. employment report and as bullion investors took profits after recent gains. Prices had climbed 4 per cent in the first three trading sessions of 2010. “With the employment report coming in tomorrow, there is a lot of caution in all the markets,” said Bill O’Neill, partner at Logic dvisors. “Gold has had a nice run since the beginning of the year and is due for some consolidation.”

Gold futures fell Thursday for the first session in the past five as jitters that China may raise interest rates and cut global growth pressured commodities and lifted the dollar, reducing the metal’s investment appeal.

Copper and Aluminium Open Interest – Price-wise, 2010 has started with a bang, with both copper and aluminium making strong gains. Interestingly, while open interest for aluminium has picked up in conjunction with rising prices, indicating new long positions have been added, copper open interest has fallen slightly, suggesting that some of the red metal’s recent strength has been due to short covering activity.

• Gold is running into resistance at $1140—$1,142. We expect the market to remain cautious ahead of tomorrow’s non-farm payroll data and as a result profit-taking ahead of the data release might take place.

• We expect large dips in platinum and palladium to be bought.

• After the bearish data, which registered a large build in crude and gasoline inventories, and only a small draw of 233K barrels in the middle distillates, it appears many market participants had to cover short positions.

• The base metals had a very strong day price-wise on Wednesday, with much of the complex making impressive gains. Aluminium had another exceptionally busy day, with over 14,400 lots trading on LME Select, while copper and lead also saw very good volumes. The base metals are a little softer this morning, with prices pulling back after yesterday’s rally.

 

 

Gold is running into resistance at $1140—$1,142. We expect the market to remain cautious ahead of tomorrow’s non-farm payroll data and, as a result, profit-taking may emerge ahead of the data. There was good physical selling in gold this morning in Asia. Shanghai arbitrage selling added to the downwards pressure in gold. Support is at $1,126 and $1,116.

After a good rally yesterday platinum and palladium are both trading lower. Both metals have seen a rise in speculative interest ahead of the expected launch of the US based ETF’s as well as gaining support from positive auto sales numbers. We expect large dips in platinum and palladium to be bought. Platinum support is at $1,525 and resistance at $1,575. US ADP employment numbers registered a decline of 84K jobs in December, slightly below the expected decline of 75K. ADP employment figures and tomorrow’s non-farm payroll numbers are highly correlated. However, since March, when markets bottomed, ADP figures have been lower than the NFP numbers every month – by an average of 72K. Should this trend continue in the December figures, we could look at a non-farm payroll number of between 0 and -12K. The market expects zero
change in December.

A better-than-expected non-farm payroll number could see equity markets rally. Looking at the recent correlation between equity markets and precious metals, we expect platinum and palladium to benefit most from good employment numbers.

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Crude Update

Jan 4

Posted by FxCommcalls in Commodity Update | No Comments

Crude managed to hit a high of $80 on the last trading day of the year as investors remained upbeat about the demand prospects in near term and falling inventories lifted the sentiments up. The commodity once again nudged near its highest level in the year after the US crude inventories slid further, extending the recent drawdown. On New Year’s eve, Nymex February West Texas Intermediate hit the $80 mark before settling well above at $79a barrel, a rise of 78 per cent in 2009.

U.S. Department of Energy (DOE) said that crude oil supplies were down 1.5 mn barrels to 326.0 million barrels. Supplies of gasoline were down 300,000 barrels and heating oil supplies were down 1.9 million barrels. The DOE also said that refinery use increased from 80.0% to 80.3% of capacity last week. Over the past four weeks, gasoline demand was up 1.1% from a year ago while distillate demand was down 2.8% from a year ago. The domestic crude oil production, meanwhile fell for a fifth week in a row to 5512 thousand barrels as on week ended 25 December 2009 compared to 5524 thousand barrels in previous week.

This ensured that oil recovered bulk of its lost ground and ends the year on a high note. Earlier in the month, fueled by S&P’s downgrade of Greece’s credit rating and the possibility of more downgrades of Euro Zone sovereign debt, particularly Spain and Ireland, dollar surged to a fresh 3 and half month high against the Euro. Oil had briefly fallen under $70 following the dollar’s exuberance and a persistent slide in US inventories. Tensions in Iran between opposition supporters and the government and by cold winter weather in the US assisted the commodity further even as the other markets remained trapped in the year end lull.

MCX Crude oil futures went up above Rs 3700 per barrel as the year end approached and looks likely to be in for a fresh rally in case the mark holds. The prices should gain some more ground given that the expiry in still around two and half weeks away and fresh longs could be seen getting build if the global prices snap pass $80 barrier.

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Crude Oil Forcast 2010

Dec 27

Posted by FxCommcalls in Commodity Update | No Comments

Crude Oil Price Forecast

West Texas Intermediate Spot Price. USD/bbl. Average of Month.
Month Date Forecast
Value		 50%
Correct +/-		 80%
Correct +/-
0 Nov 2009 78.1 0 0
1 Dec 2009 74 6 13
2 Jan 2010 85 7 16
3 Feb 2010 92 8 18
4 Mar 2010 104 9 20
5 Apr 2010 110 9 21
6 May 2010 110 10 22
7 Jun 2010 107 10 23
8 Jul 2010 103 11 24

Updated Friday, December 18, 2009

 

Crude Oil Prices

Past Trend Present Value & Future Projection
West Texas Intermediate. US Dollars per barrel.

 

 

 

Analysts expect crude oil futures to trade around $75 to $80 during the early months of 2010 and may go above $90 later in the year as the global economy recovers from the worst economic slump since the Great Depression.

These prices give plenty of comfort to producers. Opec, the producers’ cartel, has said $75 a barrel is its target, while even deep-water specialists such as BP, Shell and Petrobras can continue drilling in expensive offshore regions at a much lower price.

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Commodity: Market Update

Dec 14

Posted by FxCommcalls in Commodity Update | No Comments

The US Dollar Index at 76.01 was down 0.02%, while the Euro closed with a gain of 0.04% at $1.4732.
Today, base metals and other commodities are trading firmer on better than expected economic indicators out of China. China’s industrial production grew more than economists estimated in November and exports fell by the least in 13 months, strengthening the recovery of the world’s third-biggest economy. Factory output climbed 19.2% from a year earlier, the statistics bureau said in Beijing. That was more than the 18.2% median estimate in a Bloomberg News survey of 25 economists. Exports slid 1.2%. Consumer prices rose 0.6%, the first increase in 10 months. New loans topped forecasts.

Aluminium—Down 0.4%
Aluminium closed with a loss of $9 at $2,203.

China November aluminum output was 1.36 million tonne, the National Bureau of Statistics said today.

China’s aluminium imports in November were rose to 120.67 K tonne from 86.61 tonne in October.

Aluminium imports are up 172.2% on a year-on-year basis as China’s stimulus led to increased government spending.

Support is at Rs101.55/Rs100.10 and the resistance is at Rs102.90.

Copper—Down 1.94%
Copper closed with a loss of $135 at $6,810.

Orders for Japanese machinery fell in October, adding to signs the nation’s rebound from its deepest postwar recession isn’t strong enough to encourage companies to spend on plant and equipment

China’s import data is supportive for copper. Imports of copper and products by China, the world’s largest consumer, jumped 10% in November compared with the previous month. Shipments increased to 290,158 metric tonne last month, the customs office said today. Purchases jumped 67% to 3.9 million tonne in the first eleven months, it said.

Labor issues are likely to limit downside in short-term. Workers at Xstrata Plc’s Altonorte copper smelter may go on strike on December 23 after management and unions failed to reach a wage agreement in meetings held since last month, while wage talks are ongoing at Codelco’s Chuquicamata mine.

The Shanghai Futures Exchange (SHFE) weekly stockpiles data shows a drop of over 9,000 tonne that is supportive for the metal.

Support is at Rs319.75/Rs317.40 and the resistance is at Rs323.75/Rs327.25.

Nickel—Down 1.78%
Nickel closed with a loss of $295 at $16,275.

Demand from European stainless steel mills remains weak. The counter is not showing much reaction to rising stockpiles at LME warehouses. Consumer and producer stockpiles are still not that high, thus nickel might continue to get support around $16,000 level.

Support is at Rs768.50/Rs755.10 whereas the resistance is at Rs781.20/Rs785.

Zinc—Down 1.81%
Zinc closed with a loss of $42 at $2,270.

SHFE stockpiles rose 1,225 tonne. Cancelled tonnage is stagnant around 1%.

The metal can rise to Rs108 level today.

Support is at Rs105.95.

Lead—Down 0.26%
Lead closed with a loss of $6 at $2,275.

Lead, 2009’s best performer among the main industrial metals traded on the London Metal Exchange, is set to drop as supply increases next year, CRU said.

Lead will average $2,000 a tonne next year, according to CRU. As per CRU anything over $2,000 is a little bit on the bubbly side as the market is in surplus.

Support is at Rs106.40/Rs105.25 and the resistance is at Rs108.05/Rs110.

Precious metals—Slightly up
Precious metals complex closed with minor gains in a volatile session.

Gold—Up 0.21%
Gold closed with a gain of $2.40 at $1,131.

Today the metal is trading higher as the risk appetite is returning on the back of China’s encouraging economic indicators.

It is likely to consolidate in short-term.

Support is at Rs17,085 and the resistance is at Rs17,345.

Silver—Up 0.31%
Silver closed with a gain of 0.055 Cents at $17.405. It fell to as low as $17.135 before recovering along with gold, as the US equities extended their advance.

Support is at Rs27,274 and the resistance is at Rs27,800.

Energy complex—Crude oil down, natural gas up
Crude oil closed with a loss of 0.18% at 70.54, while natural gas at $5.298 was up 8.16%.

Crude oil fell on weaker than expected US weekly jobless data.

China, the world’s second-largest energy consumer, imported 17.1 million metric tonne of crude oil in November 28% more than a year earlier, government data showed. Imports of crude oil in the first 11 months gained 11% to 182.5 million tonne, according to the preliminary data released by the Beijing-based General Administration of Customs today. Crude-oil exports doubled from a year earlier to 420,000 tonne in November. Imports of oil products, including gasoline and diesel, fell 5% from a year earlier to 33.7 million tonne in the January-to-November period and reached 2.38 million tonne last month.

Crude oil may decline next week on speculation that US fuel stockpiles will climb as demand lags behind year-ago levels, a Bloomberg News survey showed.

Crude oil is expected to range-trade.

Support is at Rs3,292/Rs3,256 while the resistance is at Rs3,330/Rs3,376.

Natural gas—Up on inventory report
Natural gas futures surged to an 11-month high after a government report showed a bigger-than- estimated drop in US stockpiles as cold weather spurred demand for the heating fuel. Inventories fell 64 billion cubic feet in the week ended December 04, 2009 to 3.773 trillion cubic feet, the Energy Department report today showed. Analysts forecast a decline of 45 billion, based on the median of 21 estimates compiled by Bloomberg. It was the first drop since March, after supplies rose to a record at the end of November.

Natural gas can rise to Rs251 in the short term.

The support is at Rs240.20.

GOLD UPDATE

According to trade experts scrap and old jewellery sales are likely to increase by 10-15% in the current year because of profit-taking and distress selling, . What might not be known is the active presence of the Muslim community among sellers of scrap and old jewellery.  Interestingly, initial findings of a survey that’s under way by Taqwaa Advisory & Shariah Investment Solutions (TASIS) — an organisation providing Shariah advisory and investment solutions within the Indian legal framework — show that community members with monthly savings of Rs 5,000 and above prefer gold as an investment option in Bangalore. “That’s because there are not many Islamic banks or Islamic investment options here,” said Shariq Nisar, director, TASIS. “There are options for investments into, say, listed companies that are debt-free and not in non-compliant businesses such as liquor, tobacco or into lending and borrowing. But there’s a problem here too. For instance, if a debt-free company that is Shariah-compliant invests its surplus into interest-bearing assets, that becomes taboo too. So, though we are endeavouring to make the community aware of investments that are least non-compliant, people are putting away their money into gold and making a profit by sale when the price rises,” he said.

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Commodity Snippets

Dec 7

Posted by FxCommcalls in Commodity Update | No Comments

Copper—–
Copper extended the morning losses as Dollar extended some gains against the EURO which enthused profit booking. Copper benchmark contract is now trading at Rs 326.95 per kg down Rs 3.

Dollar now trades at 1.4811 up 45 pips against the EURO.

It will be interesting to see what would be the effect of the global rebalancing act by the hedge funds in January, considering the rampant pace which Copper adopted in the year 2009. The prices are likely to see some hiccups in the next few months.

Xstarta announced last week that it will boost its capital spending in the year 2010 by 89% to $ 6.8 billion. “Most of the increased capex would go towards the nickel, coal and copper divisions for new and expanded mines” Chief Financial Officer Trevor Reid said during a seminar.

Xstrata said its board had approved spending $542 million to extend the life of its Ernest Henry copper and gold mine in Australia until at least 2024 by shifting to underground mining. The copper unit has six advanced projects to deliver 60 percent production growth by 2015, Charlie Sartain, chief executive of Xstrata’s copper division, said.

Rice——-
Indonesia may raise the price it pays for rice purchased from local farmers by 10% next year, tracking global increases in rice prices and fertilizer costs, Agriculture Minister Suswono said Monday.

Chinese Economic Growth—–
The Chinese government pledged Monday to push forward the transformation of its economic development pattern next year while maintaining stable and comparatively fast economic growth.

Participants at the three-day annual Central Economic Work Conference agreed that the global financial crisis highlighted the urgency to transform China’s economic development pattern.

They agreed that the government should coordinate efforts to maintain stable and comparatively fast economic growth and speed up the transformation of the economic development mode.

Meanwhile, As per latest released by China Sugar Association, China produced 792,000 metric tons of sugar during November, up 9.2% from previous year.

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