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Commodities

Oil prices fall under pressure over rising number of COVID-19 cases in China

Brent crude was down by 0.24% to trade at $55.12 barrel, and WTI futures inched down by 0.10% to $52.22 a barrel.

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Crude Oil worker, OPEC, oil prices, Bulls hit back to support US crude oil amid panic sell- offs in global equity markets, Nigeria’s local oil players smashed by low crude oil prices

Oil prices drifted lower at the first trading session in London, recording a second consecutive trading session of losses, as the ever-rising number of COVID-19 cases, particularly in China, raise energy demand fears.

What you should know: At the time of writing this report, Brent crude was down by 0.24% to trade at $55.12 barrel, and West Texas Intermediate futures inched down by 0.10% to $52.22 a barrel.

China’s National Health Commission revealed that the world’s largest importer of oil recorded 124 cases on Jan. 24, up from 80 earlier, which is the worst wave of new COVID-19 infections seen since March 2020.

READ: COVID-19 mutant strain causes chaos at Oil markets

Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, spoke on current fundamentals weighing on oil prices, at least for the near term. In addition, he spoke on how the COVID-19 pandemic seemed to distort the bullish rally.

“The Lunar New Year headline heebie-jeebies did a number on oil prices into weeks end. Yet after hitting an intraday low US$54.48 per barrel, Brent crude managed to close above US$55 despite the clear demand impacts of lockdowns in Europe and additional measures in China.

READ: Oil traders weigh if COVID-19 support programs will buoy economic growth

The enormous question mark remains around demand and supply.

  • The street uniformly downgraded Q1 21 market in the world ex-China due to clear demand impacts of lockdowns in Europe to start the year. But last week it was back to the downward demand revision drawing board.
  • More worryingly, however, since Asia has been the backbone of physical crude oil demand, this time it was to down-ballot China consumption as lockdowns spread in the country just weeks ahead of the Lunar New Year travel surge.”

READ: Young Nigerians share their experiences on the cost of working from home

What to expect: Still, the one million barrels per day of additional Saudi curbs over February and March should alleviate the currently projected level of attrition in global demand recovery without much impact on the path of OECD inventory draws.

Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. Follow Olumide on Twitter @tokunboadesina. He is a Member of the Chartered Financial Analyst Society.

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Commodities

Gold drops to a nine-month low, U.S Fed Chief disappoints metal buyers

Gold futures were down 0.63% to trade around $1,690 an ounce. Gold prices dropped to their lowest since Jun. 8, 2020.

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Gold Up as U.S. hits Record Number of COVID-19 Cases, Gold stands firm above $1,800 over increasing virus fears and weaker dollar , Gold stands firm above $1,800 over increasing virus fears and weaker dollar, Gold prices surge higher, Traders focus on U.S. Federal Reserve

The yellow metal drifted lower at the last trading session of the week staying near a nine-month low and headed for a third consecutive weekly drop. U.S. Federal Reserve Chairman, Powell disappointed metal traders on his perception of Treasury yields pushing both the greenback and bond yields up.

At the time of writing this report, Gold futures were down 0.63% to trade around $1,690 an ounce, dropping below the $1,700 price levels. Gold prices dropped to their lowest since Jun. 8, 2020, and have lost about 2.3% for the week so far.

The U.S. 10-year Treasury yield peaked at about 1.5%, while the dollar, which usually moves inversely to gold, bounced up at morning trading session in London.

READ: Gold breaks below $1,800 per ounce, amid rising U.S Treasury yields

The most powerful monetary policymaker affirmed his stance to keep credit loose in a speech to the Wall Street Journal jobs summit held yesterday and added that the rise in treasury yields was “notable”, he did not consider it a “disorderly” move.

Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics, spoke on prevailing market conditions weighing hard on the precious metal;

“Gold continues to struggle in a trend that started right out of the gates in 2021. And by failing to $1,700 this week, the sell-off may continue.

Rising bond yields and a stronger US have been the most significant obstacle while overall economic conditions improve as the trifecta Covid-19 vaccines roll out in the US.”

READ: Robinhood restricts trading Dogecoin after gaining 1,000%

Bottom line: Metal investors have increased their sell-off in metals momentarily, with nickel the worst hit of all with $1,500 drops two days in a row.

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Commodities

OPEC+ agrees to keep Oil output unchanged, Oil up 4%

Brent Crude was up more than 4% trading around $67 a barrel.

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OPEC+ Alliance, US, Russia, Canada, Mexico reach historic deal to cut 13.4 million bpd, Oil market still uncertain over the OPEC+ deal as prices react positively, 7 oil producing countries most affected by covid-19, see where Nigeria is placed

Oil prices were all fired up at Thursday’s trading session, amid reports revealing OPEC+ agreed to Keep oil output unchanged in April.

What you should know: At the time of writing the report, Brent Crude was up more than 4% trading around $67 a barrel.

OPEC, Russia, and other oil producers on Thursday agreed to keep the status quo unchanged thereby pushing oil past its highest level since January 2020.

This is coming as a big win for the Saudis, which of late has been bent on keeping oil output in check.

Sequel to this landmark feat on keeping oil supply squeezed, OPEC+ had been debating and considering if it was ideal to restore as much as 1.5 million barrels a day of output.

However, the Oil Sherrif in the person of Saudi’s Energy Minister Prince Abdulaziz bin Salman urged other leading oil producers in keeping the status quo with the exception of slight increases granted to the Russians and Kazakhstan.

 

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