U.S. natural gas futures fell to a two-week low on Monday, amid bearish weather forecasts that should limit demand for the fuel.
NATURAL GAS – U.S. natural gas futures fell to a two-week low on Monday, amid bearish weather forecasts that should limit demand for the fuel. Prices ended lower for the second day in a row on Friday. It saw a drop of roughly 0.4% last week. A weather system with powerful thunderstorms and cooling will sweep across the Ohio Valley and Northeast through July 30 to ease national demand, according to updated weather forecasting models. Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on summer cooling demand. Nearly 50% of all U.S. households use gas for cooling. Early market expectations for this week’s storage data due on Thursday is for a build in a range between 22 and 32 billion cubic feet in the week ended July 21.
CRUDE OIL – U.S. West Texas Intermediate and international-benchmark crude oil futures rose on Monday after OPEC’s biggest producer, Saudi Arabia, pledged to cut exports in August to help reduce the global crude glut. According to a report, Saudi Energy Minister Khalid al-Falih said his country would limit crude oil exports at 6.6 million barrels per day (bpd) in August, almost 1 million bpd below levels a year ago. In addition to the Saudi pledge, the Russian Energy Minister Alexander Novak told reporters that an additional 200,000 barrels per day of oil could be removed from the market if compliance with a global deal to cut output was 100 percent. The Saudi’s Falih also added that OPEC and non-OPEC partners were committed to cut output longer if necessary but would demand that any non-compliant nations stick to the agreement.
ALUMINIUM – Closure of illegal aluminum capacity at Xinfa Group allowed the company to ask for higher processing fees for aluminum rod, SMM learned. China Aluminum Stocks Grow Slower After Hitting Nearly 5-Year High, SMM Says. The company closed 530,000 tonnes of illegal aluminum capacity last week, affecting its aluminum rod production. Exit of Low-Cost Aluminum Capacities in China to Be Filled by Restart of High-Cost Ones, SMM Warns.
GOLD – Gold prices rose to their highest level in around a month in North American trade on Monday, ahead of a busy week of economic events, including a Federal Reserve policy decision and U.S. second quarter growth data. In the coming week, global financial markets will focus on the outcome of Wednesday’s Federal Reserve policy meeting for any new insight on the timing of the next U.S. rate hike and clues on how the central bank plans to pare back its massive balance sheet. There are also several key U.S. economic reports, with the biggest being second quarter GDP due on Friday. Besides the GDP report, this week’s calendar also features U.S. data on both existing and new home sales, as well as consumer confidence, durable goods orders and weekly jobless claims. According to Investing.com’s Fed Rate Monitor Tool, conviction for another rate hike before the end of the year has faded, with just 35% of market players expecting another move by December, as the subdued inflation outlook raised doubts over whether policymakers will be able to stick to their planned tightening path. The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
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