ENERGY– Crude oil may trade on upside path as oil prices rose more than 1% on Friday after the U.S. Navy destroyed an Iranian drone in the Strait of Hormuz, a major chokepoint for global crude flows, again raising tensions in the Middle East. The United States said on Thursday that a U.S. Navy ship had destroyed an Iranian drone in the Strait of Hormuz after the aircraft threatened the vessel, but Iran said it had no information about losing a drone. The International Energy Agency (IEA) is reducing its 2019 oil demand forecast due to a slowing global economy amid a U.S.-China trade spat, its executive director said on Thursday. Last year, the IEA predicted that 2019 oil demand would grow by 1.5 million bpd but had already cut the growth forecast to 1.2 million bpd in June this year. U.S. natural gas futures eased to a two-week low after the release of a government report showing a near normal storage build last week allowed the market to focus on forecasts for cooler weather and lower demand next week than previously expected.
BASE METAL – Base metals may trade with upside path. China’s top copper smelters on Thursday lowered their floor treatment and refining charges (TC/RCs) for the third quarter by 24.7%, two people familiar with the matter said, with one adding smelters will consider cutting output if low rates persist. Nickel extended its rally into another day on Friday, having hit a four-year high in Shanghai overnight, after comments from two Federal Reserve officials revived bets for an aggressive rate cut this month, lifting the base metals complex. Nickel, used to make stainless steel is heading for a weekly gain of 11.6% in London this week on bullish Chinese stainless steel output data and concerns over Indonesian export curbs, That would be its biggest weekly gain since April 2009. The global nickel market deficit widened to 12,500 tonnes in May from a revised shortfall of 7,500 tonnes in the previous month, the International Nickel Study Group said on Thursday.