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Commodities

Brent crude records minor gain as growing concerns over COVID-19 limit upside

Brent crude is the leading global benchmark for Atlantic basin crude oils.

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Brent crude drops to $25, oil demand drops by about 10% of world’s consumption, Brent Crude Oil hits $26, as Nigeria's Sweet Crude demand falls, Oil price pushes up before OPEC meeting, Asian equity markets mixed, NIGERIA OIL: Darker days ahead as Brent falls below production cost, Brent crude drops, as oil traders focus on OPEC+ meeting

Brent crude gained about 0.68%, to trade at $43.08 a barrel by 5.01 am local time, after a 4.3% gain recorded in the previous week.

The implied volatility for Brent crude price has plunged to the lowest levels triggered by prices collapsing at the end of Q1 2020 as many oil traders shifted their attention to tightening oil output due to the agreement with the Organization of the Petroleum Exporting Countries (OPEC) and its allies.

Quick fact: Brent crude is the leading global benchmark for Atlantic basin crude oils. The international benchmark is used to set the price of crude oil for about two-thirds of the world’s traded crude oil, including Nigeria’s crude (Bonny Light, Brass River, Qua Iboe, etc.).

READ MORE: Update: FG announces new dates for domestic flight operations

Stephen Innes, Chief Global Market Strategist at AxiCorp, in a note to Nairametrics, explained in detail the positive macros affecting oil prices. He said:

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“Positive macro inflection points – most recently, the rebound in US employment – continue to support oil despite the disquieting trajectory in the US coronavirus cases.

“OPEC production, which is at the lowest level since 1991 has also been helping, both with sentiment and the fundamentals for oil.

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“And while the rebalancing of supply and demand still seems to be occurring more quickly than expected, risks remain. OPEC’s planned July 15 meeting may address the possibility of once again extending the most extensive phase of the OPEC+ production cut agreement.”

Amid rising numbers of COVID-19 cases in major cities of the world’s largest economy and consumer of crude oil, a Reuters tally showed that in the first four days of July alone, 15 states in America reported upward movement in the number of new COVID-19 infections, with events over the holiday possibly triggering another upsurge.

Olumide Adesina is a French-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment Trading. Member of the Chartered Financial Analyst Society. Behavioral Finance, Duke University. You can follow Olumide on twitter @tokunboadesina or email [email protected]

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Commodities

Crude oil prices post third weekly losses in four weeks

Crude prices printed their third weekly loss in four at the end of its most recent trading session.

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Where next for oil prices?, Brent crude futures gained 0.14 to trade at $34.70 at the time this report was drafted, recovering some of its losses earlier in the oil trading session. , Brent crude price fails to remain over $40, concerns over pledge cut strengthens

Crude prices printed their third weekly loss in four at the end of its most recent trading session.

Oil traders are concerned about the blurred demand outlook in the short term, as an unexpected build in oil production coupled with additional oil supplies Libya, rattled the nerves of oil traders.

What we know; West Texas Intermediate futures, the key gauge used to determine U.S. oil prices, settled at $40.04 per barrel. For the week, West Texas Intermediate lost 2.1%.

Brent crude, the world’s benchmark for crude oil prices, settled at $41.92 for the week, Brent lost 3%.

The most recent OPEC+ meeting failed to reassure traders about oil-producing members, complying with production cuts till the end of 2020.

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Also reports from Libya in the past week revealed it expected to raise production by around 260,000 barrels per day, by next week, up from some 100,000.

Stephen Innes, Chief Global Market Strategist at AxiCorp, in a note to Nairametrics spoke on supply-side fundamentals of crude oil by saying,

“Again, it been another week where traders have been inundated with dreary demand news, but it was supply-side fundamentals that supported crude oil again this week.

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“Prices have been backed with the Department of Energy (DOE) inventory stats showing a crude draw and the same a significant drop in gasoline stocks.

“Supply is far less of a problem to the view than demand. Robust compliance from OPEC+ on cuts and limited upside for US production should keep supply below demand in for the foreseeable future and help global inventories move in the right direction.”

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Commodities

Gold prices suffer worst W/W decline since March

Gold futures prices settled at $1.866.30/ounce, showing a loss of 0.56% at the last trading session of the week.

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ETF, stocks, shares, investment, equity,Gold loses some shine on hopes for COVID-19 vaccines

Gold futures declined on Friday, to post a loss of nearly 5% for the weekthe largest weekly percentage loss since mid-March. Gold traders have had significant losses on the precious metal to the strength in the U.S. dollar this week.

What we know: Gold futures prices settled at $1.866.30/ounce, showing a loss of 0.56% at the last trading session of the week.

READ: FG inaugurates gold refinery project, boosts smaller-scale mining operations

Rising COVID-19 caseloads in emerged markets have distorted investment strategies of global investors, as the world’s economic recovery seems to be fragile, driving investors into dollars, which has weighed on the bullion-asset.

On top of that, gold traders have also unwound some of their gold holdings as a part of this week’s equity-market sell-offs, which added to the pressures around precious metals.

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READ: Gold loses $70 dollars in an hour after reaching $2,000

Other precious metals such as palladium, platinum are also headed for their worst week since the COVID-19 pandemic began to impact financial markets.

Stephen Innes, Chief Global Market Strategist at AxiCorp, in a note to Nairametrics, highlighted the key macros dampening the optimism of gold bull.

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READ: Gold Prices cross $1800, first time since 2011

“Gold investors remain less than flattered by the procession of Fed speakers since the FOMC less dovish than expected retort on September 16.

“Most of the focus was still falling on the US Fed’s Charles Evans’ uncomplimentary for gold comments when he suggested that US interest rates go up before the 2% inflation target is hit.”

That said, the outlook remains positive for gold in the long term, on growing COVID-19 cases; also, high geopolitical uncertainty could keep the yellow metal above $1,700/ounce price level in the midterm.

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Commodities

Oil prices propel above $40/barrel but bulls prospect remains weak

Brent crude (LCOc1) was up 0.41% to trade at $42.11 a barrel by 0706am GMT.

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Crude oil prices surge, as China plans to import large volumes of U.S. crude

Crude oil prices rallied higher on Friday at the opening of London’s trading session.

The black liquid is on track for a weekly decline because of rising concerns about the global resurgence of COVID-19 infections and its effects on fuel demand, while additional supplies from Libya continue to weaken oil bulls’ prospect.

Brent crude is heading for a price decline of around 2.5% this week with WTI also on track for a price fall of about 1.5%. Both benchmarks are also heading for a monthly decline, which would be the first for Brent in six months.

READ: FIRS moves to stop tax evasion with newly launched intelligence system 

What we know; Brent crude (LCOc1) was up 0.41% to trade at $42.11 a barrel by 0706am GMT, while U.S. West Texas Intermediate (WTI) crude (CLc1) gained 0.42% to trade at $40.48.

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Stephen Innes, Chief Global Market Strategist at AxiCorp in a note to Nairametrics spoke on the price movement of crude oil with prevailing macros affecting the price.

READ: Oil prices slump over prolonged COVID-19 restrictions, Libya resumes production

Saying, “Oil prices bounced overnight as investors turned optimistic that the US Congress may resume stimulus discussions that have been stuck in the swap. Lawmakers were all ears after a chorus of US Federal Reserve committee members were again at pain to point out the need for additional fiscal support. And cries from the world’s top central banker Jerome Powell struck a chord during this week’s testimony to Congress and the Senate. Lawmakers in contentious election battles can ill afford the negative press around Congress’ dithering during the next 6-week election run-up. A US stimulus package pre-November election is very much underpriced and could be a significant catalyst for oil’s demand function and could punch prices higher.”

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However, supply-side dynamics are quite more encouraging than before and should get reflected in a strong downtrend in inventories over the next few months

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