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Commodities

Crude oil prices drop, major oil powers to ease record oil supply curbs

Brent crude lost about 0.59%, to trade at $43.52 per barrel by 05.33 am GMT.

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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

Crude oil prices dropped on Thursday morning at London’s trading session, after OPEC’s leading allies agreed to alleviate record supply curbs of crude from next month. Although the plunge in crude oil prices got softened by the recent drawdown in U.S crude oil inventories.

Brent crude lost about 0.59%, to trade at $43.52 per barrel by 05.33 am GMT, and West Texas Intermediate (WTI) crude lost about 0.72%, to trade at $40.90 per barrel.

READ MORE: Avoiding or mitigating recession in post COVID Nigeria – Olisa Agbakoba

The Organization of the Petroleum Exporting Countries (OPEC) and its allies have agreed to increase crude oil supply starting from next month, as demand continues to rise to pre-pandemic levels.

OPEC+ agreed to reduce the daily production cut from 9.6 million barrels a day to 7.7 million barrels a day from August. The reduction in cuts was backed by both Saudi Arabia and Russia, including other participating oil ministers in the virtual conference.

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“Some investors took profits after the OPEC+ decision, but a big draw in U.S. crude provided some support,” Kazuhiko Saito, chief analyst at Fujitomi Co said.

READ MORE: Why Nigeria’s banking stocks performed well in May

In addition, Stephen Innes, Chief Global Market Strategist at AxiCorp, in a note to Nairametrics, spoke about the sentiments oil traders are presently having. He said:

“Despite the increase in COVID-19 cases and lockdown restrictions in individual states, US oil demand recovery continues.

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“Traders expect the market to tighten over the second half of 2020, so the peak for US oil inventories may be behind us. However, there is a risk that the restart of shut-in wells could put upward pressure on US crude stocks in the near term.”

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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

Gold prices suffers its worst week plunge since March

Gold prices lost about 4.5% in value this week after hitting a record peak of $2,072.50 on August 7.

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

Gold price ended the trading session for the week on a bearish note.

This was its worst week since March, as U.S. Treasury yields surge and delay of the stimulus package from U.S congress dented the bullion metal’s upside.

Gold futures settled lost 0.85% to trade at $1,953.60.

Gold prices lost about 4.5% in value this week after hitting a record peak of $2,072.50 on August 7.

Higher U.S yields increase the opportunity cost of holding non-yielding assets such as gold, which has gained over 28% so far in 2020.

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Stephen Innes, Chief Global Market Strategist at AxiCorp in a note to Nairametrics spoke on the macros affecting the yellow metal’s price. He said;

“And fortunately for gold investors, they have friends at the Fed as speakers unanimously reside incredibly cautious about the US economic recovery.

“It has been a tumultuous week for the gold price, which is back to $1950 levels, having clawed back a good chunk of this week’s losses. The US dollar remains under pressure as investors are growing more skeptical of Congress’s willingness to pass a stimulus package.

Still, it could be a challenge for gold markets to regain last week’s fame as more fixed income traders are willing to short bonds now, which complicates the bullish gold view.”

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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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