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Commodities

Crude oil prices fall lower, oil traders focus on OPEC meeting

Brent Crude lost about 0.62% to trade at $42.94 a barrel, at 6.05 am Nigerian time.

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Crude oil prices dropped on Monday morning at London’s trading session, as oil traders placed their focus on an OPEC technical meeting scheduled to hold on Wednesday. The meeting is expected to recommend an easing in the curb on oil production that has helped rally crude oil prices in recent months.

Brent Crude lost about 0.62% to trade at $42.94 a barrel, at 6.05 am Nigerian time, also the American benchmark for crude, WTI, lost about 0.72% to trade at $40.26.

Crude oil prices remained relatively unchanged in the previous week as the resurgence of COVID-19 caseloads soared in the world’s largest oil-consuming economy, and the plan to impose travel restrictions in some global economies. These factors could most likely trigger a decline in the demand for oil.

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Quick Fact: Brent crude is the leading global benchmark for Atlantic basin crude oil. The international benchmark is used to set the price of about two-thirds of the world’s traded crude oil including Nigeria’s crude.

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The importance of crude can’t be ignored; it is used mainly in fueling aircraft, vehicles, and trucks that facilitate economic lifestyles and activities in the modern world. Derivatives from refined crude are used in the production of polymers, as well as the production of waxes, tars asphalts, and lubricants.

READ ALSO: The odds against Bitcoin- Goldman Sachs

Stephen Innes, Chief Global Market Strategist at AxiCorp in a note to Nairametrics explained the macros, which oil traders are presently monitoring. He said:

“The recent surge in coronavirus infection numbers in the US and elsewhere have brought demand risk back into focus.

“The planned easing of OPEC+ production cuts next month after a one-month extension of the initial phase of the production cut plan and a potential rebound in US production could add pressure on the supply side of the equation.

“And factor in Libya lifting the force majeure, it adds another unwanted level of supply-side uncertainty at an extremely critical point in the oil price recovery phase.

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READ ALSO: Global oil prices drop after reports of unexpected inventory build

“While the evidence suggests we are past the trough for oil and that supply and demand are rebalancing, near-term headwinds remain as the short-term fundamentals are about as muddy as possible.”

However, crude oil prices rallied more than 2% on Friday after an upward forecast by the IEA in its 2020 oil demand by 400,000 barrels per day.

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

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Commodities

Brent Crude price trades at $45 per barrel, as fuel demand picks up

Brent crude held most of it gains from the previous trading session.

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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 oil prices dropped slightly at Asia’s trading session.

Brent crude prices held most of it gains from the previous trading session after U.S. government data showed a fall in U.S Crude Stockpiles supporting the view that fuel demand is picking up despite the COVID-19 pandemic.

Brent crude was slightly down by 0.07% to trade at $45.40 a barrel by 04.32 GMT, after a gain of around 2% in the previous session.

READ ALSO: Top banks’ stocks plunge, as bears overwhelms Nigerian tier-2 banks’ rally

Quick fact: Brent crude is the leading global benchmark for Atlantic basin crude oil. The international benchmark is used to set the price of crude oil of about two-thirds of the world’s traded crude oil including Nigeria’s crude.

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However, Stephen Innes, Chief Global Market Strategist at AxiCorp in a note to Nairametrics, revealed vital macros, that could keep crude oil relatively stable in the coming days. He said;

“But even worries around stalled US fiscal talks are partly offset by the US administration’s conciliatory tone on China’s compliance with the ‘Phase One’ trade deal.

“The upcoming six-month assessment seems unlikely to prompt any significant fireworks. Also, investor’s optimism remains high on a vaccine cure that is no longer being viewed as a pie in the sky.

“Finally, the US dollar’s weakness helps Oil prices in general, but even more so in this environment, as the weaker US dollar reflects a global “risk-on” environment, not a flagging US economy. “

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Global COVID-19 cases now exceed 20 million, so in the absence of meaningful progress on a COVID-19 vaccine, traders are still looking over their shoulders to where new lockdowns might be necessary.

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Commodities

Gold prices drop below $1,900 after U.S dollar strengthens

The plunge came as appetite for risk assets recovered thanks to a stronger greenback and real rates.

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Gold soars above $1850, rises to 9-year high

Gold prices dropped sharply on Wednesday at London’s trading session. Gold futures were down 2.69% to trade at about $1,893.20 as at the time this report was drafted.

The plunge came as appetite for risk assets recovered, thanks to a stronger greenback and real rates. The U.S dollar is up on Wednesday, continuing to rise from its two-year lows.

The present huge sell-offs recorded in the precious metal market astonished many gold traders after the per-ounce price of the yellow metal plunged below $1,900.

READ MORE: Silver surpasses three-week high, joins Bullish momentum

Here’s an Insight: Stephen Innes, Chief Global Market Strategist at AxiCorp, in a note to Nairametrics, explained the macros, giving Gold bears such strength, as the precious metal continues its sudden downward trend. He said;

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“The real pain trade gold as swollen positions got hit with the truncheon, and gold plunged the most in seven years as the bottom fell out of the markets with US Treasuries and bunds bear-steepening and real yields higher.

“Gold markets sold off picking speed exponentially as freshly minted gold longs ran for the exit.

“And in typical low liquidity August fashion, market makers were merciless pounding gold to within a hair’s breadth of $1900 as the steam roller got heading downhill when the afternoon Shanghai session saw waves of Asia banks selling en masse.”

READ ALSO: LINK, most profitable crypto-asset in 6 months, gains 451%

Whether or not gold can regain its previous highs will depend on whether there is more room for downside in real yields or more dovish policies by the US Federal Reserve. Still, the possibility of squeezy price action remains in play after the US Bond market sent out the most explicit warning last week.

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Commodities

Gold price loses $80 following Russia’s COVID-19 vaccine approval

This marks gold’s steepest daily decline in nearly five months.

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

Gold futures have lost about  5% or $80 in less than four hours, at the London trading session this afternoon.

Gold futures fell as low as $1,950 per ounce, $80 differential from its opening price of $2,030

This marks gold’s steepest daily decline in nearly five months, even as global stocks went bullish following news that Russia’s COVID-19 vaccine has obtained regulatory approval.

READ MORE: Cocoa prices melt lower as COVID-19 weakens demand 

The COVID-19 vaccine approval by Russia was met with some skepticism by experts.

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Russian President Vladimir Putin announced on Tuesday that a locally developed vaccine for COVID-19, Sputnik-V, has been given regulatory approval and is ready for use.

Russian Health Minister Mikhail Murashko said that the vaccine had “proven to be highly effective and safe”, with mass vaccination planned to start in October.

But health regulators elsewhere have cast doubts on the vaccine, as it has not yet gone through safety trials and Russia did not offer any scientific evidence of the vaccine’s effectiveness and safety.

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